The new UK budget: How it affects Swedish scale-ups
Yesterday, Chancellor of the Exchequer John Healey delivered his Budget, the first under Prime Minister Andy Burnham. What does it mean for Swedish companies looking to set up in the UK? We have broken down the key measures.
Devolution: more power to the regions
Since taking office, Prime Minister Andy Burnham has been on a mission to move power away from London and Westminster and deliver “good growth in every postcode”. The practical detail of the devolution is still to come, but a 10-year plan has been promised for later this year.
The UK is so much more than London, and Swedish businesses are spread across the country, with London the usual first base and the Northwest a common next step. It remains to be seen whether the 10-year plan will make it more attractive to go beyond London, sooner.
Business rates
Since his appointment, Chancellor of the Exchequer John Healey has committed to keeping corporation tax at its current level and raised the rateable value threshold for small business rates relief for retail, hospitality and leisure businesses from £12,000 to £18,000*. For a new entrant in those sectors renting a small premises, that could make a real difference to the bottom line.
It’s also good news for pubs, clubs and live music venues in England will see a 20% cut in business rates from April 2027, following the 15% relief this year.
0% VAT on electricity bills for SMEs
Although not in the Budget, earlier this month Andy Burnham announced that VAT will be scrapped on electricity bills (currently 5%) for small businesses until end of March 2027. It applies to households, plus businesses and charities who already qualify through the existing VAT declaration process, and HMRC holds the customer responsible if VAT is undercharged.
Please note that an ordinary office, shop or other commercial premises still pays 20% standard-rate VAT.
National Insurance & Pensions
The Budget states that Employer National Insurance remains at 15% on salaries above £5,000, and the employer minimum under auto-enrolment remains 3% of qualifying earnings.
From 6 April 2029, employers will pay National Insurance on any employee pension contributions made through salary sacrifice above £2,000 a year per employee. Employees will pay it too, so firms offering salary sacrifice should review their pension schemes and payroll costs ahead of the change.
Taxation
Income tax thresholds remain frozen at their current levels until April 2031, and capital gains tax also remains unchanged. Dividend income tax rates already increased from April 2026, with the ordinary rate rising to 10.75% and the upper rate to 35.75%.
Savings and property income tax rates increase from April 2027 to 22%, 42% and 47% at the basic, higher and additional rates respectively. The writing-down allowance main rate for capital allowances reduces from 18% to 14% from April 2026, alongside a new 40% first-year allowance from January 2026.
Property surcharge
From April 2028, there will be a new annual surcharge on homes in England worth over £2 million, dubbed the ‘mansion tax’. It falls on the owner, but landlords may pass it on through higher rents, so relocation budgets may need a small adjustment.
Our verdict
Overall, the Chancellor is making smaller changes as opposed to big shifts for incoming companies. For specific advice, speak to a chartered accountant or an expert in financial planning.
SOURCES:
The Budget of His Majesty's Government 2026
The Swedish Chamber of Commerce: The Swedish Footprint Study
Business Sweden: The Swedish Footprint Study
*BBC News: Budget 2026 - Key points at a glance
Disclaimer: This article is for general information only and does not constitute legal, tax or financial advice. The information is correct as interpreted from official sources as at 28 October 2026. UK4 Sweden accepts no responsibility or liability for any errors, omissions or reliance placed on its contents. Readers should seek independent professional advice before acting.
