If you’re considering selling your business, it’s important to know that the latest budget brings significant changes that could impact your potential sale. For many, the timing of a sale has never been more crucial, with potential tax savings hanging in the balance. At Bracey’s, we specialise in guiding business owners through this complex journey, ensuring that we maximise your financial outcome at every step of the sale.

What impact has the new budget had on business sales?

One major change centres on Business Asset Disposal Relief (BADR). Currently, if you sell your business and meet the qualifying conditions (e.g. owning at least 5% of the company shares and being an officer for a period of at least 24 months), you can benefit from BADR. This allows the first £1,000,000 of your gain to be taxed at a rate of 10%. However, this relief is only guaranteed until 5th April 2025. If you sell after this date, you could face a tax increase. For example:

• Selling a business for £2,000,000 before 5th April as a qualifying husband-and-wife team would result in a £200,000 tax bill at 10%.
• Selling the same business on or after 6th April 2025 could see that tax bill rise to £280,000—an additional £80,000.
• Selling the same business after the 6th April 2026 would see that tax bill increase to £360,000.

This makes it vital for sellers to act now if they want to take advantage of the current tax relief. If you are considering putting your business up for sale, we advise following this four-point plan:

1. Plan Your Sale Strategically

Prepare Your Business for Sale: Review financials, ensure compliance, and make your business as attractive as possible to buyers. Find the Right Buyer: Discuss with Bracey’s how best to connect with potential purchasers who are both ready and able to transact.

2. Ensure You’re Selling at the Right Time

Selling a business is a process that takes time. From preparing your company for sale to negotiating with buyers and finalising agreements, each step requires careful attention. With 5th April approaching, now is the time to act if you want to maximise your financial outcome. Accelerate Negotiations: Bracey’s can work closely with you and your potential buyer to agree on Heads of Terms (the scope of the deal) and draft the Sale and Purchase Agreement (SPA). These steps, which can take months, need to be handled efficiently to meet deadlines. Coordinate with Professionals: Bracey’s will also collaborate with solicitors and accountants to structure the deal for optimal tax outcomes, ensuring you the best opportunity to achieve the 10% rate while avoiding delays.

3. Explore Alternative Routes

If a traditional sale isn’t viable within your timeframe, alternative options such as Employee Ownership Trusts (EOTs) may be worth considering. EOTs enable you to be able to sell your business to employees, resulting in no tax liability at all.

4. Appoint a Deal Shepherd

Every business sale is unique, with unexpected challenges often arising. At Bracey’s, we can act as your “Deal Shepherd”, guiding you through every stage, including negotiating deal terms, structuring the transaction for maximum tax efficiency, and ensuring a smooth and timely exit that aligns with your goals—whether that’s cashing out quickly or maintaining a role in the business. At Bracey’s, we’ve helped countless business owners achieve successful exits. Whether you’re ready to sell or just exploring your options, we’re here to provide the expertise and support you need. Contact us today to start your journey and ensure your business sale is as profitable and stress-free as possible. Book a free 30 minute consultation now to understand our full suite of accountancy services.