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Table of Contents

• EDITOR’S RAMBLE 🗣

• FEATURED REPORT 📰

• TOGETHER WITH BARBRI* 🤝

• STUFF THAT MIGHT HELP YOU 👌

EDITOR’S RAMBLE 🗣

We don’t usually send a newsletter on a Friday — but since the Budget was announced this week (and it’s application season), I thought it’d be useful.

The Budget is massive and super complicated, but I wanted to highlight a few changes that matter for one reason: helping you in applications, interviews and assessment centres.

This isn’t a guide on how the Budget affects you personally — it’s a breakdown of the bits that shape how businesses operate (and how it impacts commercial law firms).

Once you’ve read it, reply to this email to let me know what you think!

– Idin

If you do want a quick summary of how the Budget affects you individually, here’s a good article.

FEATURED REPORT 📰

💰 How to talk about the Budget in your applications

What’s going on here?

Labour’s Chancellor, Rachel Reeves, shared the UK Budget this week. The Chancellor is the person in government who manages public finances.

What is the Budget?

The Budget is a yearly statement which outlines the government’s plans for things like taxes and public spending for the coming year.

What’s the impact on businesses?

1. The cost of investing in equipment has changed

What is it? 

“Capital allowances” are tax rules that let companies pay less tax when they spend money on things like machinery, equipment or building upgrades. Because they get some of that cost back through tax relief, the investment feels cheaper.

These rules matter most for businesses that spend a lot on physical assets, like manufacturers, logistics companies, data centres, energy firms and property developers.

What’s changed? 

When companies buy new equipment, they typically get their tax relief spread out over several years.

There’s now a new rule that lets companies claim 40% of the cost upfront on some items that currently only get slow, yearly relief. This gives businesses a quicker tax saving in the year they make the purchase. But the yearly rate for the remaining relief is being reduced.

At the moment, companies claim 18% a year on most types of equipment. From 2026, this will drop to 14%, so the rest of the relief comes back more slowly.

Why does this matter? 

Put simply, companies get a bigger tax saving in year one — that gives them better cash flow and makes some projects easier to afford. But they get smaller tax savings in later years, which slightly reduces the long-term benefit.

For example, a car manufacturer buying £10 million of new robotics equipment could now claim £4 million upfront. That gives the business more cash in the first year, which might make the project affordable sooner.

But a logistics company spending £25 million on a warehouse fit-out might get its relief more slowly, because much of the spend won’t qualify for the 40% rule. If the tax saving comes later, the project’s “pay back” period will be longer. So the company may choose to reduce the size of the project, or switch to leasing the equipment instead of buying it.

This changes the calculations on different projects: some investments will now look profitable sooner, while others may take longer to “pay back”.

2. Global companies will face stricter tax rules

What is it? 

International companies follow rules about where they pay tax and how they move money between different parts of the business.

These impact decisions like where a company hires staff, where it records its revenue, how it sets prices between group companies, and how it structures its supply chain.

What’s changed?

The government’s shifting the rules that decide when a global company has to pay tax in the UK and how it must report its activity.

There are three big changes:

1. Tighter rules on foreign companies with UK staff: The UK is rewriting its “permanent establishment” rules, which decide when a foreign company is seen as doing business here. If a company abroad has people in the UK who help win or negotiate deals, HMRC can now more easily say the company is really operating “in the UK” — and tax some of its profits here.

2. Taxing profits that are unfairly moved out of the UK: If a company shifts profits abroad to avoid UK tax, HMRC can now pull those profits back into the UK’s normal corporation tax system and tax them here. This replaces the old “Diverted Profits Tax”, which used to sit outside the main tax rules and was complicated to deal with. The change makes it easier for HMRC to challenge profit-shifting and harder for companies to move profits in low-tax countries.

3. New group disclosure rules: Large groups will have to give HMRC much more detail about the transactions between their companies in different countries. From 2027, they must file a new annual form called the International Controlled Transactions Schedule (ICTS). It covers cross-border payments inside the group — things like IT charges, management fees, interest, logistics and intellectual property. This gives HMRC a much clearer view of how profits move around the group.

Why does it matter? 

These changes affect how global companies structure.

Take a US tech company that keeps its sales team abroad to avoid UK tax. If it still uses UK-based staff to warm up clients or help negotiate deals, the new rules let HMRC treat those activities as happening “in” the UK. That could pull more of the company’s profit into UK tax, so it may need to rethink who does what and where contracts are agreed.

Or take a clothing company that bases its IT or marketing teams in a low-tax country and charges its UK company for those services. Under the new ICTS rules, every internal payment has to be shared with and justified to HMRC. If the charges look inflated or unusual, HMRC can challenge them more easily. That may push groups to simplify their structures or rethink whether certain departments should really sit in low-tax countries.

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3. Some sectors will face higher costs, others get relief

What is it?

The Budget changed a few tax rules that affect everyday business costs.

These changes don’t hit all sectors the same way. Some industries will save money, while others will face higher costs.

What’s changed?

The Budget shifts costs between sectors — some won, some lost out.

A few targeted updates stand out:

• Business rates: Business rates are a tax that companies pay on the buildings they use — like shops, offices, warehouses and factories. In the new rules, retail, hospitality and leisure businesses will get more relief on their business rates. But large warehouses and distribution centres are expected to pay more over time.

• VAT on ride-hailing platforms: Until now, apps like Uber and Bolt only paid VAT on their small profit margin, not on the whole fare (because they used a special travel rule called the Tour Operators’ Margin Scheme). The government has now changed this. So now, they must charge VAT on the entire fare, not just the bit they earn as profit.

• Import rules for small parcels: Until now, goods worth £135 or less were exempt from customs duty — but that exemption is being removed. Low-value imports will no longer get special treatment, and overseas sellers and online marketplaces will need to pay any customs duty that applies.

• Tax rises for gambling companies: The government is massively increasing the tax that online gambling companies pay (called the Remote Gaming Duty). The tax on betting apps and online casinos will rise from 21% to 40% next April.

Why does it matter? 

These changes in costs impact real business decisions.

A ride-hailing platform that now pays VAT on the full fare may need to increase prices or cut its commission to stay competitive with traditional taxis. That affects profit margins and could frustrate its drivers if they have to absorb the cost.

A retailer choosing between opening a new shop or investing in a delivery warehouse will look at the numbers again, now. Shops now have lower business rates, while big warehouses are becoming more expensive. This could push companies to reopen high street sites or shrink their warehouse footprint.

A small overseas seller who used to ship low-value parcels into the UK tax-free must now register for import VAT. This may lead them to store goods inside the UK or use UK-based fulfilment centres to avoid delays and extra paperwork.

Online betting groups must rethink their UK strategy. A platform that suddenly pays almost double the tax on gaming revenue may cut marketing spend, close loss-making products, or pass costs to customers through worse odds. That impact could trigger restructuring, layoffs, or even consolidation in the sector.

4. Stamp duty has been removed for new LSE listings

What is it?

When a company lists its shares on the London Stock Exchange, investors buying those newly listed shares usually pay stamp duty — a 0.5% tax on the purchase. It’s small, but on large trades it adds up.

What’s changed?

For the next three years, the government is removing stamp duty entirely on new London listings. This doesn’t apply to all share trading — it’s specifically for newly listed shares, and only for that three-year period. The idea is to make it cheaper and more appealing for investors to buy into companies that choose to list in London.

Why does it matter? 

London has been losing listings to places like New York, where valuations are higher and investors are more active. Scrapping the 0.5% tax is meant to make London look more competitive and encourage more companies to list here.

Lower upfront trading costs could boost demand for new listings, helping the LSE attract both international companies and UK firms that might otherwise list abroad.

For example, an investor buying £50 million of newly listed shares would normally pay £250,000 in stamp duty. Removing that cost makes a London listing more appealing for global investors comparing markets.

5. Selling a business to its employees has got more expensive

What is it?

When a founder sells their business, they sometimes choose to sell to an Employee Ownership Trust (EOT) — a structure that transfers the business to the employees.

EOTs are popular with founders of small and mid-sized companies, such as manufacturing firms, professional services businesses, engineering firms, tech consultancies and regional retailers.

These owners often choose an EOT because they want the company to stay independent, and they want to protect the jobs of long-serving staff. Plus, until now, they could sell the whole business without paying capital gains tax.

What’s changed?

Selling to an EOT used to mean founders paid no capital gains tax on the sale — which was a huge incentive.

Under the new rules, only 50% of the gain is tax-free. The rest is taxed at the normal CGT rate. So, selling to employees in this way is now less attractive.

Why does it matter?

This change alters the incentives for real business sales.

Imagine a founder selling a business for £10 million. Under the old rules, selling to an Employee Ownership Trust (EOT) meant they paid £0 capital gains tax.

Under the new rules, only £5 million is tax-free. The other £5 million is taxed at the normal capital gains tax rate. So instead of keeping the full £10 million, the founder might now lose £1–2 million in tax.

For many owners, that difference could mean they change the entire exit plan. They may end up choosing a trade sale (selling to a competitor) or selling to private equity instead.

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