Chancellor John Healey delivered his first Budget last week on Wednesday 28th October. Most of the headlines were aimed at households, but five measures land directly on lenders, brokers and the firms that support them.
At a glance: a higher first-year allowance, a lower writing-down allowance, a temporary bank surcharge increase, tougher HMRC enforcement and mandatory VAT e-invoicing from 2029.
Capital Allowances
The main-rate first-year allowance rises from 40% to 50% for qualifying plant and machinery from 1 January 2027, and full expensing for new plant and machinery continues. Most assets bought for leasing qualify, however cars, second-hand assets, and assets leased overseas do not.
The writing-down allowance on the main pool falls from 14% to 12% from April 2027.
A bigger deduction up front strengthens the case for new equipment, while the lower rate on the remainder makes holding assets for longer less attractive. Lessors and asset finance providers may want to revisit replacement cycles, pricing and forecasts before January.
Bank Surcharge
The bank corporation tax surcharge doubles from 3% to 6% between 1 January 2027 and 31 March 2028. It’s temporary, but it adds cost for bank lenders, and funding partners will be watching how it affects pricing and lending appetite.
HMRC Compliance
From 1 April 2028, taxpayers are expected to be required to correct known errors in their returns, and failing to do so is likely to be treated as deliberate. HMRC is also adding 670 compliance officers and gaining new powers to collect lower-value tax debts directly from bank accounts.
More enforcement puts more weight on accurate data, timely reconciliation and clean handovers between teams.
VAT E-Invoicing
Mandatory VAT e-invoicing starts on 1 April 2029. Businesses will need to send structured electronic invoices rather than PDFs, exchanged through the Peppol network, with detailed rules due by April 2028. Lenders, brokers and outsourcing partners will need systems that produce this data cleanly, so an early review is worthwhile.
Public Funding
The Government is adding £20.4 billion of capacity for the British Business Bank and the National Wealth Fund, including a new venture debt product. More public-backed capital could widen the funding options open to the businesses brokers work with.
How VLS can help
These changes affect how portfolios are priced, reported and run. VLS supports financial organisations across the UK, and our teams can provide targeted portfolio reviews and operational support tailored to your structure.
