Chancellor John Healey has confirmed the Autumn Budget will land on Wednesday 28 October 2026. For business owners who are weighing up a sale in the next year or two, it’s a date worth watching closely, as tax on business disposals has moved twice in the last eighteen months already, and the rumour mill suggests it isn’t finished.

Below is where things stand: the political backdrop, what’s actually being speculated about, and, because it’s one of the questions we get asked most, the full history of Business Asset Disposal Relief and what might happen to it next. As ever with Budget speculation, none of this is confirmed until the Chancellor sits down on the day, so treat it as context for planning conversations, not as advice to act on.

A new Chancellor, a new set of pressures

This will be the first Budget delivered under Prime Minister Andy Burnham, with John Healey as his Chancellor. New leadership usually means a genuine reset in direction, and Burnham has been open about his own view that the UK “taxes work more heavily than wealth” – a philosophy that puts capital gains, dividends, and wealth-related taxes squarely in the spotlight rather than income tax or VAT.

The fiscal backdrop hasn’t got any easier. Estimates of the gap the Chancellor needs to close range up into the low twenty-billions, driven by higher borrowing costs and existing spending commitments. Labour’s manifesto pledge not to raise income tax, employee National Insurance or VAT still stands, which narrows the options. And historically, when those three levers are off the table, capital gains tax, dividends, pensions and property are where governments look instead.

What’s actually being rumoured

A few themes keep coming up across the tax and advisory commentary:

• Capital gains tax is the biggest area of uncertainty. Burnham has previously said he wants to look at aligning CGT more closely with income tax rates. Full alignment would be a significant departure from how gains have traditionally been taxed in the UK, and nothing has been confirmed, but it’s the change advisers are flagging most consistently ahead of this Budget.
• Dividends may see higher rates or a smaller tax-free allowance, since dividend tax sits outside the “working people” manifesto pledge; the same logic that saw dividend rates rise in last November’s Budget.
• Pensions could face a cap on the National Insurance relief available on salary-sacrifice contributions, and a review of the 25% tax-free lump sum is being talked about again, as it has been ahead of several recent Budgets.
• Property owners and landlords may see tighter reliefs, and there’s speculation the £2 million threshold for the high-value council tax surcharge could be lowered to £1.5 million. Wider reform of council tax and stamp duty remains a longer-term debate rather than something expected in October.
• Inheritance tax is a genuinely mixed picture for business owners. There’s speculation the government could revisit April 2026’s changes to Agricultural and Business Property Relief, potentially softening them, given Burnham has indicated he wants to “look again” at how the farming community was affected. Nothing is confirmed, but it’s one of the few areas where the rumours point toward relief rather than restriction.
• Business rates support already announced; a 20% reduction for hospitality, leisure and retail, plus specific help for pubs, clubs and music venues looks set to continue, alongside talk of broader high street reform.

Business Asset Disposal Relief: how we got here

BADR is the relief that matters most directly to anyone selling a trading business, so it’s worth setting out the full history before looking at what might come next.

We’re not fans of Budget speculation, and we like it even less when it tips into scaremongering; a nervous owner is not a well-served owner. But BADR has a habit of changing with almost no notice, and changes tend to bite from the very next tax year. So, while we’re hoping for the best, we’d rather our clients were prepared for the worst.

• 2008 – Entrepreneurs’ Relief introduced, replacing the old taper relief system. Flat 10% rate of CGT on qualifying gains, up to a £1 million lifetime limit.
• 2010 (March Budget) – Lifetime limit raised to £2 million.
• 2010 (June emergency Budget) – Limit extended again to £5 million.
• 2011 – Limit increased to £10 million, where it stayed for nearly a decade.
• March 2020 – Lifetime limit cut sharply back to £1 million, and the relief was renamed Business Asset Disposal Relief. It’s been £1 million ever since.
• April 2025 – Rate increased from 10% to 14%, as legislated in the October 2024 Budget.
• April 2026 – Rate increased again to 18%, the second step of that same 2024 announcement.

So in less than two years, the effective tax rate on a qualifying business sale under BADR has gone up by 80% (from 10% to 18%), even though the £1 million lifetime limit hasn’t moved.

Last November’s Budget left BADR itself untouched, but did cut the CGT relief available on sales to Employee Ownership Trusts from 100% to 50% of the gain, closing off one of the routes some owners had been using as an alternative.

What might happen to it in October

Nobody is currently pointing to a specific confirmed change to BADR for this Budget, but the loudest speculation right now is about the main rate of CGT, not the relief itself. But the two are connected.

If ministers do move to align the headline CGT rate more closely with income tax, BADR’s 18% rate and its £1 million cap become the main thing standing between a business owner and a much larger tax bill on sale. That makes BADR a natural place to look if the government wants to claw back some of the revenue it would otherwise lose by protecting entrepreneurs, and it’s exactly the kind of relief that’s been narrowed twice already in the last six years.

What this means if you’re thinking about selling

Budget speculation is exactly that, speculation, and we’d never advise anyone to rush a sale purely on the back of a rumour. Deals done for the wrong reasons, at the wrong pace, tend to be the ones people regret.

But the pattern over the last two years is BADR has moved twice, always upward, always announced in the Budget and effective from the following April. If a sale is realistically on your horizon in the next twelve to eighteen months, it’s worth having the conversation now about timing, valuation and readiness, so you’re in a position to act on facts once the Chancellor actually stands up on 28 October, rather than reacting after the event.

If you’re already in process with heads of terms signed and working through due diligence, it’s less about speculation and more about momentum. Push to get to completion ahead of the Budget where that’s realistically achievable, make sure everyone at the table (you, the buyer, both sets of lawyers and accountants) is aligned on timeline and pulling in the same direction, and keep due diligence moving as efficiently as possible rather than letting it drift.

None of that means cutting corners; a rushed deal that unravels post-completion is worse than a clean one that lands in November. But a deal that’s ready to complete shouldn’t be left to run past a Budget it didn’t need to.

We’re not tax advisers, and nothing here should be treated as tax or financial advice – please speak to your accountant or tax adviser about your own position.

What we can help with is the practical side; an honest view of what your business is worth today, what buyers are active in your sector, and what a realistic timeline looks like if you decide the time is right.

Get in touch and we’ll talk it through.

The political commentary in this article is used for illustrative purposes only and does not reflect any political affiliation or endorsement on the part of Business Partnership. This insight is intended as general information, not formal advice. Every business and exit is different, so please seek tailored professional guidance before making any decisions.

The Covid-19 pandemic has had a huge effect on everyone in 2020, but it will continue to have longer-term effects as governments look for ways to address the unexpected spending and lost income, they have faced this year. One possibility that has been discussed in both the UK and the USA is increasing Capital Gains Tax to boost the public finances. If this goes ahead then it could have significant implications for business owners who are thinking about selling.

Capital Gains Tax Increases

Raising Capital Gains Tax is one of the options that the government is considering in order to cover the costs of the Covid-19 pandemic. A recent report from the Office for Tax Simplification (OTS) suggested that an additional £14 billion could be raised by making changes to the tax. The recommendations included doubling the rate of Capital Gains Tax to bring it in line with income tax while also reducing exemptions. While such dramatic changes to the tax system are unlikely to happen immediately, the government will be considering how they can generate more from Capital Gains Tax. Smaller changes to the system may be more likely. Increasing Capital Gains Tax, perhaps to a flat rate of 28%, has been discussed for a long time and the current situation may provide the impetus for the government to act.

How Could It Affect Your Business Sale?

Changes to Capital Gains Tax could have big implications if you are planning to sell your business. The amount you pay on capital gains is currently determined by your income, with only those earning over £50,000 a year paying the highest rate of 20%. In addition there is Entrepreneurs relief – reducing capital gains to 10% of the 1^st £1m of gains on a business sale. Until March 2020 this relief was up to the first £10m, so the Government have indicated they are not afraid to change this tax.

Overall Capital gains rates are lower than for income tax because gains are often accumulated over a long period. If you’ve spent years building up your business before selling, it doesn’t make sense to tax you at the same rate as the income that you generate every year. The effects of increasing Capital Gains Tax would be particularly hard for small business owners (i.e. abolishing Entrepreneurs relief) as it could dramatically cut the cash retained when selling up – often a vital component of their pension.

Is Now the Right Time to Sell Your Business?

The risk of an increase in Capital Gains Tax could mean that it is better to sell your business now rather than to wait until the rates rise. However, it is unclear when or if the Government will increase Capital Gains Tax, so this shouldn’t be the only factor you consider, especially if you weren’t planning to sell for at least a few years – the tax tail should not wag the commercial dog. Indeed, it could be better to wait and risk paying more in taxes if you increase the value of your business over the next few years, as long as the value growth outweighs any increase in taxes.

 It is also worth considering what you will be doing with the proceeds. An increase in Capital Gains Taxes could also affect any investments you’re planning to make in the future, as you will pay tax on the profits you make from these too.

In conclusion, whilst an increase in Capital Gains Tax could be on the cards, which could mean selling your business now rather than later is better, it’s important to look at the bigger picture of what your business could be worth in the future.

Fortunately, you are not alone. At Business Partnership we can help you understand the current value of your business and what it could be worth in a few years, to help you judge this vital decision.

You can either take one of our Value Builder Scores or speak to your local partner – just enter your postcode here and we will do the rest?