Small and medium-sized enterprises (SMEs), which account for nearly 99% of UK businesses, are facing what industry groups and lawmakers describe as a “cost crunch” comparable to pressures seen during the pandemic, but without equivalent support. Multiple business bodies and parliamentary committees are now urging urgent action as April 2026 approaches.
The Federation of Small Businesses (FSB) has warned that a concentrated cluster of cost increases landing in April will hit SMEs hard. The key drivers include:
This combination is projected to dramatically increase operating costs for many small firms, with some estimates suggesting an employer with nine staff could see employment costs jump by roughly £25,000+ annually due to wage and sick pay changes alone.
The FSB has specifically described the situation as a “perfect storm” of cost pressures; not one isolated factor, but multiple policy and price changes hitting simultaneously.
The spotlight isn’t only on April’s cost shifts. The House of Commons Business & Trade Committee recently concluded that small businesses are now operating under cumulative structural pressures comparable to the pandemic era (or worse) without emergency support. According to the committee’s findings, SMEs face a combination of:
The committee described these pressures as “structural and self-reinforcing“, warning they risk accelerating closures, hollowing out high streets, and undermining UK economic growth if left unchecked.
Multiple industry reports indicate that the mounting pressures are already affecting business confidence. Many SMEs expect to:
This aligns with recent small business research showing cost concerns are at their highest levels on record, with running expenses topping the list of strategic business worries.
Small businesses are deeply embedded in the UK’s economic fabric. Sharp cost increases have multiple knock-on effects:
The committee and business groups are calling for policy responses that recognise the distinct scale and role of SMEs, rather than uniform cost increases that disproportionately hit smaller firms.
While macroeconomic and policy environments evolve, businesses can take proactive steps to build resilience:
Cashflow planning
Prepare scenario forecasts that factor in April’s cost shifts and test projected impacts on liquidity, employment costs, and margins.
Cost benchmarking and pricing
Review customer pricing models and cost structures to ensure rising overheads are appropriately factored into commercial terms.
Operational efficiency
Tighten operational controls, streamline procurement and seek cost-effective technology solutions that protect service quality.
Engage with sector bodies
Participation in representative groups like the FSB and business alliances helps amplify SME voices in policy discussions and reform calls.
Funding and liquidity options
Explore flexible finance solutions, such as invoice financing, to smooth short-term cashflow gaps without immediately diluting ownership. However, this approach should be used cautiously where forward sales visibility is weak. Additional borrowing in an uncertain trading environment can amplify risk rather than relieve it, particularly if revenue projections fail to materialise. Careful stress-testing of repayment capacity and downside scenarios is essential before increasing leverage.
The emerging picture for April and beyond is one of intensifying cost challenges and uncertainty for UK small businesses. While policy shifts and economic conditions are beyond individual control, robust planning, financial discipline, and informed decision-making will be key to navigating this period.
At Business Partnership, we’re monitoring these developments and advising owners on cashflow optimisation, valuation impact analysis, and strategic positioning; all critical as operating environments shift. If your business is assessing the impact of these cost pressures or considering exit and acquisition opportunities in this context, we can help you assess value and identify options that align with your goals.
This article is provided for general informational purposes only and does not constitute financial, legal, tax, or investment advice. Every business operates under unique circumstances, and decisions should be made only after taking appropriate professional advice tailored to your specific situation. Business Partnership accepts no liability for actions taken or not taken based on the content of this publication.
Business Partnership is pleased to announce that Cameron Young, current Partner for the Edinburgh office, has joined the Board as Business Development Director.
Cameron’s appointment follows a transformative year for Business Partnership, during which the firm underwent significant strategic change, strengthening its national proposition and future-proofing the business for long-term growth.
Since joining Business Partnership, Cameron has played a central role in driving the firm’s evolution, working closely with the board and partners to deliver major initiatives across systems implementation, digital transformation, strategic partnerships, and the full brand refresh launched in 2025.
In his new board role, Cameron will be responsible for leading business development strategy across the UK, supporting partners with growth, strengthening national relationships, and helping shape the next phase of Business Partnership’s expansion.
Raymond Blin, Chairman of Business Partnership, commented:
“Cameron’s appointment to the board is a natural progression. Over the past year, he has been instrumental in helping modernise the business. His commercial insight, energy, and deep understanding of what business owners really need make him a huge asset at board level.”
Paul Dodgshon, Managing Director, added:
“Cameron brings a rare combination of hands-on deal experience and strategic thinking. He understands growth from both an owner’s and adviser’s perspective, and his contribution throughout 2025 has been exceptional. This role formalises the impact he’s already having and positions us strongly for the future.”
The appointment follows a landmark year for Business Partnership, which saw the rollout of new internal systems, a redesigned website, enhanced partner collaboration, and a refreshed brand designed to better reflect the firm’s modern, people-first approach to business sales and acquisitions.
Cameron’s leadership was central to delivering these initiatives, working across teams to ensure that innovation was matched with practicality and that improvements directly benefited both clients and partners.
Commenting on his appointment, Cameron said:
“I’m incredibly proud to be joining the board at such an important point in Business Partnership’s journey. The last year has been about building strong foundations; this next phase is about growth and continuing to raise the bar for how business sales should be done.”
The Autumn Budget has landed – or more accurately, leaked.
Thanks to the OBR accidentally publishing its report ahead of schedule, we had the chance to start reading through it before the Chancellor had even finished clearing her throat. It’s not often government paperwork arrives early…
Jokes aside, the Budget contains a series of subtle but significant shifts that directly affect UK business owners. While headlines will inevitably focus on personal taxes and welfare reform, the real story for SMEs and owner-managed companies is buried in the details.
Below is a business-focused breakdown of what’s changing, why it matters, and what owners, directors, buyers, and sellers should be thinking about next.
The Budget includes a 2-percentage-point increase across all dividend tax bands from April 2026, affecting all owner-managed companies that rely on dividends as a key method of profit extraction. This follows several years of frozen allowances and reduced dividend thresholds, further eroding the traditional “small salary + dividends” model.
What this means for business owners
For business buyers
A major under-the-radar change; National Insurance will now apply to salary-sacrificed pension contributions. For years, salary sacrifice has been one of the most tax-efficient remuneration tools for directors and senior staff. That advantage has now been partially removed.
Implications
Practical next steps
The Budget delivers one of the most significant changes to succession planning in years; capital gains tax relief on disposals to Employee Ownership Trusts will be cut from 100% to 50%. This does not scrap EOTs, but it removes their most powerful incentive to business owners.
Previously, owners selling to an EOT paid 0% CGT. Under the new rules, half of the gain becomes taxable, meaning many sellers will face an effective CGT rate of around 10% (assuming 20% CGT on the taxable portion). For many business owners, particularly those in professional services and owner-managed firms where EOTs surged in popularity, this is a meaningful shift.
Key points
For business advisers and buyers
A relief to many. While no further changes were announced, it’s crucial for owners to remember that BADR is still moving from 14% to 18% in April next year. This remains a significant shift that materially reduces the attractiveness of selling at the 10% rate on the first £1m of lifetime gains (which had already been cut from £10m in 2020).
What this means in practice
Another technical but important change in this Budget is the reduction in Writing-Down Allowances (WDAs) on capital expenditure. The main pool WDA, which applies to most plant and machinery, will fall from 18% to 15%, while the special rate pool for integral features and long-life assets will drop from 6% to 4%. For capital-intensive businesses, this change increases taxable profits by slowing the rate at which investment can be written off.
Manufacturing firms, engineering companies, construction businesses, automotive operators, and fleet-heavy sectors will feel this most acutely. In practice, it lengthens the payback period on new equipment and reduces the near-term tax benefit of investing in plant, machinery, or upgrades. At a time when financing costs are already elevated and margins are under pressure, this shift makes future capital expenditure decisions more complex and, in some cases, less attractive.
Impact on valuations
It’s worth noting that while WDAs are being reduced, certain qualifying investments may continue to benefit from enhanced first-year allowances (e.g. 40% FYA on main-rate assets). These do not offset the broader reduction in writing-down allowances but may offer limited relief for growth-focused or CAPEX-intensive firms making strategic investments. Eligibility will depend heavily on asset type and scheme qualification.
The OBR forecasts that business profits will decline in 2025 before beginning a gradual recovery. More importantly, the real rate of return on capital, a key measure of underlying business profitability, is projected to fall to around 10.75% in 2026, down from 12.5% in 2022. This downward shift reflects a range of structural and cyclical pressures across the economy. Wage growth remains elevated, productivity continues to stagnate, and borrowing conditions are still tight. Inflationary pressures remain embedded in supply chains and operating costs. At the same time, many businesses have delayed investment decisions over the past two years, creating a backlog of capital expenditure that is becoming harder to finance or justify.
Together, these factors reinforce a challenging environment for UK SMEs. Higher costs, slower growth, and weaker investment incentives mean many firms will struggle to expand margins. For sectors with naturally low pricing power, absorbing cost increases without eroding profitability will be particularly difficult.
Impact for owners
Impact for buyers
The OBR has once again downgraded expectations for business investment; hardly surprising given persistent low confidence and high borrowing costs. Businesses in manufacturing, logistics, construction, care, and hospitality may find it harder to justify long-delayed investments in fleets, machinery, and infrastructure.
For many SMEs, this means higher financing costs, extended payback periods, and increased operational risk. Buyers evaluating businesses with ageing assets or significant CAPEX backlogs may apply downward pressure to valuations or seek more conservative deal terms. However, tech-enabled and scale-up SMEs may benefit from targeted support schemes such as enhanced investor reliefs, though access and eligibility remain sector-dependent.
The government’s extended freeze on personal tax thresholds will pull an additional 780,000 people into basic-rate tax, 920,000 into higher-rate, and 4,000 into additional-rate tax by 2029-30. A process economists politely refer to as fiscal drag, where everyone else might simply call “a tax rise by stealth”. This freeze quietly reshapes spending patterns across the SME economy.
Impact on SMEs:
While business rates were not directly changed, the Budget highlighted mounting financial pressure on local authorities with significant increases in SEND (Special Educational Needs and Disabilities) provision costs. Historically, when local authority costs rise and funding does not, business rates follow.
Some industry commentary suggests that future business rate reforms may offer targeted support for smaller high-street, hospitality, or leisure operators, while larger commercial properties could face higher liabilities. However, the Budget provides limited clarity, and local authority funding pressures still point toward upward pressure overall.
Now is the time for business owners to take stock; the changes mentioned reshape how profits are extracted and how businesses fund growth. Forecasts should be updated to reflect higher tax drag and constrained consumer spending, and CAPEX plans should be revisited with more scrutiny than ever.
Anyone considering selling their business should re-examine valuation expectations. Lower profitability forecasts and a higher long-term tax burden will influence buyer appetite and deal structure. Timing also matters, as with BADR rising to 18% next year, sellers should model scenarios to understand how this affects net proceeds. Succession planning deserves a fresh look too; while EOTs remain viable, the removal of the full CGT exemption means the financial calculation has shifted.
This Budget may not have delivered dramatic headline tax changes, but it quietly rewrites the financial environment for UK business owners. Higher extraction taxes, reduced investment incentives, softer profitability forecasts and the highest tax burden in modern UK history all point toward a more challenging operating climate. For owners, the next five years will demand disciplined planning, careful decision-making, and a clear understanding of the financial and strategic options available.
This is exactly where Business Partnership can help. Whether you’re considering selling your business, weighing up an EOT, exploring an MBO, or simply trying to understand how these changes affect your valuation, we can help you model the numbers, assess your options, and decide the best route forward. Our advisors work with owners across every sector of the SME economy, helping them plan their exit and maximise value with confidence.
If you’re thinking about your next move, now is the time to start the conversation. Click here to find your local Business Partnership advisor or contact us here. We’re here to guide you through every step.
This article is provided for general information purposes only and does not constitute financial, tax, legal, or investment advice. Tax rules are subject to change and their application will vary based on individual circumstances. Business owners should seek professional advice tailored to their specific situation before taking any action based on the contents of this article.
Business Partnership is delighted to announce a new strategic partnership with The Value Builder System™, a leading global methodology for assessing and improving the value of privately owned businesses. This collaboration brings together Business Partnership’s proven expertise in business sales, valuations, and exit planning with The Value Builder System’s evidence-based approach to helping owners increasing the value of their companies ahead of sale or succession.
Through this partnership, Business Partnership’s clients will benefit from The Value Builder System’s eight key drivers of value, providing a clear, structured process to increase attractiveness to buyers and deliver stronger outcomes at exit. With seven Accredited Value Guides across the UK, our nationwide team is uniquely placed to combine local market knowledge with a globally recognised framework.
Paul Dodgshon, Managing Director and Accredited Value GuideTM commented:
Business Partnership’s mission has always been to help business owners secure the best possible result when selling. This partnership strengthens that mission by giving us a proven, consistent, and highly practical approach that works in any sector.
John Warrillow, Founder of The Value Builder SystemTM and Built To Sell explains:
At the core of The Value Builder SystemTM is a simple but powerful principle: businesses that are designed to run without their owners, built around repeatable systems, not singular personalities, are the ones that truly deliver value. Partnering with Business Partnership means more UK business owners can access this framework through advisors who understand both the local market and the real drivers of long-term value. In this partnership we can give owners the clarity, resilience, and details the choices they need to make to deliver the best possible outcome when it’s time to move on.
This alliance reflects both organisations’ shared commitment to providing business owners with trusted, transparent, and results-driven advice ensuring they can plan their next chapter with confidence.
Geoff Kwateng, Partner, Guilford Office and Accredited Value GuideTM further commented:
The Value Builder framework gives our clients real clarity. It identifies exactly where their business excels, where it needs attention, and how to make it more valuable in the eyes of a buyer.
Business Partnership is one of the UK’s most experienced independent business broker. Our nationwide network of Regional Partners gives us real presence on the ground, reaching locations others don’t. This local knowledge, backed by partner insight means we deliver trusted advice and proven results. Find your Accredited Value GuidesTM here.
The Value Builder SystemTM is a scientifically proven methodology that helps you increase the value of your business by focusing on the 8 key drivers that are proven to impact the value of your company. This system offers an assessment to baseline the sellability of a business and provides a framework to improve its value, ultimately creating a more resilient and profitable company. Find our more here.
Business Partnership, one of the UK’s most trusted business brokers, is delighted to announce a new strategic partnership with Bonham & Brook, leading tax advisors and funding specialists. This collaboration brings together two highly respected firms to deliver enhanced value, expertise, and tailored services to their clients.
Through this partnership, Business Partnership’s clients will gain access to Bonham & Brook’s renowned services, including advice on R&D Tax Credits, Energy Tax relief, Land Remediation Tax, and Capital Allowances; all helping business owners unlock hidden tax reliefs when buying, selling, or investing in businesses and commercial property. At the same time, Bonham & Brook’s clients will benefit from Business Partnership’s extensive expertise in business sales, valuations, exit planning, and acquisitions.
This alliance is designed to create seamless opportunities for clients seeking both transactional and tax-efficiency solutions, ensuring they maximise value whether they are buying, selling, or growing their businesses. The partnership reflects both firms’ shared commitment to supporting business owners with trusted, transparent, high-quality advice that makes a measurable difference.
Raymond Blin, Chairman of Business Partnership, commented:
We are thrilled to join forces with Bonham & Brook. Their specialist knowledge of capital allowances perfectly complements our work in supporting business owners throughout their journey – whether preparing for sale, acquiring a new venture, or unlocking value in their existing operations. Together, we can provide a broader, more integrated service that adds real strategic benefit to our clients.
David Kent, Commercial Director of Bonham & Brook, added:
When business owners are making big decisions – whether they’re growing, adapting, or getting ready to sell – they need advice that’s grounded, reliable and actionable. That’s exactly what this partnership is about: a shared mission of helping people get the most value out of their business and move forward with confidence
About Business Partnership
Business Partnership is a national network of experienced business brokers helping business owners achieve successful exits. With over 45 years of experience, the firm provides tailored solutions in business sales, valuations, and acquisition support. Find out more here.
About Bonham & Brook
Bonham & Brook is a leading UK specialist in capital allowances, helping businesses and commercial property owners secure valuable tax relief through expert analysis and claims. Their team is committed to maximising tax savings with transparency and precision. Find out more here.
What does it really take to sell a business? How can owners prepare for one of the biggest decisions of their lives? And why does the business brokerage industry have such a mixed reputation?
These were just some of the questions explored when Cameron Young, Partner of our Edinburgh Office, joined Craig Alexander Rattray on the popular Know Your Numbers podcast.
In an honest and insightful conversation, Cameron shared his journey from growing up in a family business to successfully selling it, before stepping into the world of business brokerage to help other owners navigate their own exits.
Cameron’s story begins in Lesmahagow, where his family ran a wedding stationery business before transforming it into Cake Stuff, a leading online supplier for professional cake decorators.
“I grew up in the family business,” Cameron recalled. “Even at the dinner table, it was always part of our lives. I hated school, but I loved working in the business, helping with everything from packing orders to digital marketing.”
After studying Law and Business at university – where he surprisingly excelled, winning the prestigious Court Medal – Cameron returned to help the family scale the business further.
By 2020, Cake Stuff had become a major player in its market, and when a competitor approached them about a potential merger, Cameron found himself leading negotiations for the first time.
Like many owners, Cameron initially tried to handle the sale himself. But the process was draining and time-consuming.
“I just had this panic lightbulb moment one night – what if this is all just a distraction technique from my competitor? What if they don’t actually want to buy, and I’m losing focus on the business?”
That’s when Cameron realised he needed experienced support. His father-in-law introduced him to Business Partnership, and it was actually myself that went to visit him and his family.
“Raymond was in our boardroom the next day,” Cameron said. “Straight away we knew he was the right person to guide us. He took over negotiations, brought in the right legal and accounting team, and let us get back to running the business. That last quarter before completion ended up being our best ever.”
The sale was successfully completed, allowing Cameron to move into a transition role before eventually stepping away.
It was this experience – seeing the good, the bad, and the ugly of the business sales world – that inspired Cameron to join Business Partnership.
“The business brokerage industry has a terrible reputation in some circles,” Cameron admitted. “There are too many cowboys overvaluing businesses just to win the listing, taking big upfront fees, and then failing to deliver.”
Business Partnership takes a very different approach.
“We’re here to give realistic valuations, honest advice, and personal support. Sometimes that means telling a client they’re not ready to sell – and showing them how to get there instead of taking their money upfront. It’s about integrity and transparency.”
With 11 regional offices across the UK, Business Partnership prides itself on offering local, personal service while sharing national expertise. Cameron and the rest of our team are on a mission to raise industry standards, providing clear resources for owners considering an exit.
Towards the end of the podcast, Craig asked Cameron to share his three key tips for any business owner thinking about selling. Here’s what he said:
Craig summed it up perfectly during the show:
“What makes Business Partnership different is honesty, transparency, and realistic expectations. You’re changing how people see this industry – and that’s exactly what’s needed.”
For Cameron, joining Business Partnership felt like the perfect next step:
“I’ve been on the other side of the table. I know how stressful it can be. Now, I want to make the process clearer, fairer, and better for other owners.”
Listen to Cameron’s episode of the Know Your Numbers podcast with Craig Alexander Rattray – it can be found on all usual podcast platforms:
➡️ Spotify
➡️ Apple Podcasts
➡️ Amazon Music, PodBean & more
➡️ Just ask Alexa: “Play Know Your Numbers Podcast”
We’re delighted to welcome our new Business Partnership broker and franchisee to the team. Geoffrey Kwateng (Geoff to his friends) takes responsibility for the areas of Crawley, Guildford and Reigate(Opens new window).
A qualified Biomedical Scientist, Geoff began his career as an assistant at one of the biggest laboratories in the UK. He became General Manager for a laboratory in Guildford, Surrey, and from there became involved in consultancy work which led him to start his own business – Fusion Diagnostic Solutions.
If you own a business in a GU or RH postcode and are planning to sell, working with Geoff could provide the impetus and support you need to achieve your plans. Read our Q&A with Geoff to find out all about him and his skills in brokering business sales.
I live in the Guildford area and I used to live close to Reigate, so I know the towns and the businesses in these areas really well. We’re blessed with lots of sci-tech, research and development, IT, manufacturing, healthcare and pharmaceutical businesses, which is my personal area of expertise and my focus within the Business Partnership team.
I always knew I wanted to start something for myself. Consultancy found me through my work at the lab where I enjoyed helping clients with their strategic projects. Clients from the lab asked for my help with their business planning and operational development.
I founded Fusion Diagnostic Solutions in 2023 and many of the clients I worked with were thinking about selling. This led me to do a lot of research into exit planning, mergers and acquisitions. I found it really interesting and decided it was an area I wanted to pursue, brokering my first M&A deal in the healthcare sector within two and a half months. When I came across Business Partnership I thought the business broker role would be the perfect complement to my strategic consultancy skills.
It was a big achievement and one I’m proud of. I can’t promise every business sale will be that quick, but I’ll do my best to offer the same level of support to every client I work with.
Years in the lab and in consultancy have developed skills in interpreting complex data, partnership working, process and performance optimisation, and driving strategic improvement. My strengths in understanding management accounts and knowledge of how to market a business also come into play. I’m a strong communicator and good at building relationships. When you work in a niche market like I have, you have to know how to connect with others and leverage your contacts to grow. I just love getting to know people!
The most rewarding thing is being able to make a difference. The work we do has a powerful impact on other people’s lives. When an owner sells their business there’s something bigger waiting for them, whether that’s retirement or another form of financial freedom. Everyone has their own aspirations and I’m happy to be here to help them achieve them and get to that next stage of life.
I’m really excited to get started and get out and about meeting local business owners. I’ve got my marketing plans in place and you’ll be hearing a lot from me on LinkedIn. If you see me at a networking event or come across my posts on LinkedIn, please introduce yourself and say Hello!
The Business Partnership team is brimming with experience and business acumen. The partners I have met so far have been really friendly and helpful and I’ve been very impressed with the thorough training and onboarding experience.
I’m here to help and guide you to secure the best possible outcome for your business exit or purchase. It’s easy to work with me. Get in touch on 07955 541428, email geoff.kwateng@business-partnership.com or connect with me on LinkedIn.
Welcome to the team Geoff!
Link through to town page once live.
No matter your political opinion, with Donald Trump’s return to the US presidency, British businesses and policymakers are closely watching how this could reshape the “special relationship” and impact trade, defence, and global partnerships.
Trump’s “America First” focus suggests a return to protective trade policies. This means UK businesses might face more significant barriers when trading with the USA, especially in sectors like tech, agriculture, and automotive. With a bilateral UK – USA trade deal pursued, and following his last tenure, the terms might be heavily tilted towards American interests, potentially challenging British exporters and the government.
In defence (literally, not argumentally), Trump has previously emphasised that NATO allies should increase their contributions, calling for a ‘radical reorientation’. His return could reignite calls for the UK and other allies to ramp up defence budgets, possibly altering long-standing defence dynamics and existing foreign relationships. The UK could see more transactional terms in its security agreements, impacting collaborative defence projects and budgets.
Trump’s approach to international alliances has often been more direct, prioritising individual gains over collective commitments. This stance could affect the UK’s participation in joint initiatives, particularly around global issues like climate action and international trade agreements. British businesses with US subsidiaries or partnerships might need to prepare for regulatory shifts that could arise as American priorities pivot.
A foresight for adaptability will be key. With potential shifts in trade tariffs, regulatory policies, and defence contributions, UK companies may need to stay agile and proactive in responding to changing conditions of their usual terms. Building resilience in international strategies and understanding the evolving American business landscape will be crucial for potential long-term success, although difficult.
Trump’s win introduces a new set of dynamics for UK & American relations, with both opportunities and challenges on the horizon. While trade deals may become more transactional, there could also be unique opportunities for those positioned to navigate a potentially protectionist US market.
For some businesses, these potential challenges may lead to strategic decisions about their future, including the option to sell or seek new ownership to better navigate uncertain times. If you’re considering this route, we are here to help. Business Partnership specialises in guiding business owners through the sale process, ensuring they maximise their value in changing markets. Feel free to reach out to discuss your options and how we can support your next steps.
Following today’s government budget announcement, significant changes to Business Asset Disposal Relief (BADR) were revealed. These changes will impact business owners looking to sell in the coming years, if not months. It would be fair to say that our team at Business Partnership expected these changes, however unwelcome they may be.
Starting in April 2025, business owners will see an increase in the capital gains tax (CGT) rates applied to BADR, which could substantially impact the proceeds from their business sale. To provide some clarity on today’s announcement, I wanted to break down what this all means for business owners and why selling sooner may be advantageous for those considering it.
For business owners selling their businesses before April 2025, the current BADR setup allows for a reduced CGT rate of 10% on the first £1 million of lifetime qualifying gains. This relief is designed to reward entrepreneurs and long-term business owners, offering a substantial tax break for those looking to exit their businesses. Any gains beyond this £1 million threshold are currently taxed at the individual’s standard marginal CGT rate, which will likely rise to 24% for many due to recent rate changes.
From April 2025, the first wave of changes to BADR will come into effect, with the CGT rate on the initial £1 million of lifetime gains increasing from 10% to 14%. While this may not seem drastic, this 4% increase represents a potentially significant additional tax burden for business owners looking to maximise the net proceeds of their sales.
For example, if a business owner realises £1 million in qualifying gains, the difference between paying 10% and 14% could mean an additional £40,000 in tax.
The most substantial change occurs in April 2026, when the CGT rate on the first £1 million of qualifying lifetime gains under BADR is set to increase to 18%. This change effectively doubles the tax rate on these gains compared to the current rate, adding a considerable financial impact for business owners.
The progression from 10% to 18% over the next two years can represent a significant difference in the after-tax proceeds from a business sale, making it increasingly less advantageous to hold off on a sale if a business owner is nearing their exit.
Any gains exceeding the £1 million lifetime limit for BADR will continue to be taxed at the taxpayer’s marginal CGT rate. This rate has also seen increases, with the majority of taxpayers now facing a rate of around 24%. With higher CGT rates across the board, strategically planning the timing of a business sale becomes even more critical.
For business owners considering selling, these staged CGT increases make the next 18 months a critical period for planning. Selling before April 2025 allows business owners to benefit from the current 10% CGT rate on up to £1 million of qualifying gains. Delaying could mean losing out on a more favourable tax rate and potentially facing up to 80% higher tax on that initial £1 million of lifetime gains by April 2026.
The government’s BADR changes highlight the importance of forward-thinking financial planning. For business owners who have been contemplating a sale, the window for benefiting from the current 10% CGT rate is closing fast. At Business Partnership, our team is ready to guide you through this evolving landscape and help ensure that your exit strategy is well-timed and optimised for maximum value.
We understand the intricacies of selling a business, including the financial, legal, and strategic considerations involved in timing the sale to maximise value. Our advisors can help assess your business’s position, evaluate the potential impact of these upcoming tax changes, and determine the best approach to move forward.
Business Partnership Expands in Scotland with Appointment of New Partner for Edinburgh, Lothian and Borders
Business Partnership has strengthened its presence in Scotland with the appointment of a new regional partner, Cameron Young, who will cover Edinburgh, Lothian and the Borders.
A marketing and eCommerce expert, Cameron brings more than a decade of experience in business management across the consumer goods and luxury retail sectors. He began his career in his family business, where he played a pivotal role in increasing revenue and expanding its digital footprint. His leadership culminated in the successful negotiation and sale of the business in a multi-million-pound deal.
Following the acquisition, Cameron was invited to stay on by the acquiring corporate group, Create Better Group – a Dr Oetker company, later becoming Head of eCommerce. He subsequently held the role of Head of Marketing and eCommerce at Chisholm Hunter – one of the UK’s leading luxury jewellery and watch retailers – overseeing both online and in-store activity.
He has also served as a board member and consultant to a range of companies, advising on operational setup, marketing strategy and business development.
“I’m thrilled to apply my passion and experience to support clients of Business Partnership. My strategic management expertise, particularly in supporting businesses to achieve growth and prepare for sale, will be central to formalising exit strategies, conducting accurate valuations, identifying potential buyers and managing transactions from start to finish.”
The appointment of Cameron marks another step forward in our ongoing expansion in key regions across the country and further strengthens our pool of expertise in high-growth sectors such as eCommerce and digital marketing.
Whether you’re selling, buying, or planning for the future, Business Partnership is here to help. Contact us today to speak with your local Regional Partner and start your journey toward success.