Selling your company will be one of the most important transactions you will make and you want to get it right.

The tax risks of selling a business should not be treated as an afterthought or something to be dealt with once a buyer is found.

Recent changes to Capital Gains Tax (CGT), Business Asset Disposal Relief (BADR) and Employee Ownership Trusts (EOTS) mean that exit planning is now more restrictive and less forgiving.

Owners who fail to plan early risk handing a substantial portion of their sale proceeds to HMRC and you must understand where these risks lie.

Capital Gains Tax

For the 2025/26 tax year, CGT on business disposals is charged at 18 per cent for basic rate taxpayers and 24 per cent for higher and additional rate taxpayers.

As CGT continues to move closer to Income Tax rates, the cost of getting the timing and structure wrong has increased.

CGT liabilities are created when contracts are exchanged, not when cash is received.

The difference of a single tax year can result in a higher tax bill, particularly for mid-market transactions.

A deal structure also plays a bigger role in determining your tax liabilities. Earn-outs, deferred consideration and loan notes can all affect when and how gains are taxed.

Without careful planning, sellers may find themselves paying tax earlier or at higher rates than expected.

Business Asset Disposal Relief (BADR)

BADR can reduce CGT on qualifying gains, making it a valuable relief available to business owners.

However, it is far more restrictive than you may realise and eligibility is assessed at the point of a business’s sale.

Changes to shareholdings, external investment, share classes, group structures or employment status could disqualify owners years before exit. These issues often emerge during due diligence and it may be too late to fix them.

Since April 2025, BADR applied a reduced CGT rate of 14 per cent on qualifying lifetime gains up to £1 million.

Any gains above this limit are taxed at the standard CGT rates of 18 per cent or 24 per cent, depending on the taxpayer’s circumstances.

From 6 April 2026, the BADR rate will increase from 14 per cent to 18 per cent and will reduce the tax advantage available to business owners who delay their disposal.

Employee Ownership Trusts

EOTs remain an attractive option for owners who are seeking a valuable exit while preserving business continuity.

However, the Autumn Budget 2025 announced that there will be a restriction on CGT relief on EOTs from 100 per cent to 50 per cent.

HMRC scrutiny has also increased and there are stricter rules around valuation and governance.

EOTs now require genuine intent and treating them as a last-minute alternative if a trade sale falls through can carry significant tax risk.

Corporation Tax

While CGT may dominate the conversation around selling your business, Corporation Tax can still affect the value.

Buyers may be cautious about trapped cash and potential tax liabilities on your balance sheet.

Poor profit extraction strategies or unclear reserves can lead to price reductions or delayed deals and a clear balance sheet and dividend strategy are a necessity.

Why does early tax planning matter when exiting your business?

The biggest risk when selling a business is often leaving planning too late.

Effective exit planning looks beyond tax liabilities alone and considers timing, structure, personal goals and succession altogether.

Planning three to five years before your exit allows for flexibility and can help reduce the liabilities to future tax changes.

How can we help with your business sale?

Selling a business can be daunting, but you do not need to make uninformed decisions.

With the right financial support, business owners can assess their CGT liabilities, BADR eligibility and alternative exit routes such as EOTs.

Our professional team can support your tax efficiency by advising on deal structures and allowable deductions that can reduce your tax liabilities.

We can ensure you remain compliant with changing reforms, while giving you confidence that you are achieving the best value for your business.

If you need support or advice on your tax liabilities when selling your business, contact us today.

Buy-to-let landlords are facing another year of tax changes and ongoing reforms to prepare for.

Rising tax on rental income and frozen Income Tax and National Insurance thresholds are all affecting landlords’ financial planning.

Buy-to-let landlords must understand how to remain compliant with the upcoming requirements and protect their finances.

What are the changes to property Income Tax?

From April 2027, the tax rates on property income, including rental income, will rise by two percentage points.

The new property income tax rates from April 2027 are:

• Basic rate (£12,570 – £50,270) – 22 per cent
• Higher rate (£50,271 – £125,140) – 42 per cent
• Additional rate (over £125,140) – 47 per cent

These higher rates apply specifically to property income, meaning rental profits will be taxed more heavily than employment income.

Higher-earning landlords will feel the greatest impact, with net rental yields coming under pressure.

Reviewing profitability, ownership structures and cash flow forecasts will be essential to managing these changes effectively.

Income Tax and National Insurance thresholds frozen

The Autumn Budget 2025 announced that Income Tax and National Insurance thresholds will remain frozen until 2031.

This freeze will create fiscal drag and rising rents will push more landlords into higher tax bands.

Even relatively small increases in rental income can create higher-rate tax liabilities and reduce their take-home pay year on year.

While rental income is not subject to National Insurance, the threshold freeze will increase the overall Income Tax liabilities and reduce the benefit of personal allowances.

What does Making Tax Digital for Income Tax mean for landlords?

Making Tax Digital (MTD) for Income Tax will affect many landlords.

From 6 April 2026, landlords with gross annual income over £50,000 from either property or self-employment or both will be required to comply with MTD requirements.

Under MTD, landlords must:

• Keep digital records of rental income and expenses
• Submit quarterly updates to HMRC using compatible software
• File an end-of-year declaration rather than a traditional tax return

Although not all landlords will be mandated in 2026, digital record-keeping will soon become unavoidable for most.

How can landlords prepare for the changes?

These changes will bring higher tax on rental profits and tighter reporting requirements.

While National Insurance will not apply to rental income, the frozen threshold and rising Income Tax mean landlords should not assume their tax position will remain stable.

With the right financial advice, you can remain compliant with MTD and assess the impact of higher taxation on your cash flow.

Early action and support can help reduce the risks and costly mistakes and help you stay compliant.

For further support or guidance, get in touch today.

Millions of workers could see their pension contributions become less tax-efficient under new plans announced by Chancellor Rachel Reeves.

Following new warnings from the Office for Budget Responsibility (OBR), what was initially presented as a targeted reform may affect more people than expected.

From April 2029, a new £2,000 annual cap will be introduced on pension contributions made through salary sacrifice that are exempt from National Insurance (NI).

Contributions above this level will still be allowed, but both employees and employers will begin paying NI on the excess.

What are the salary sacrifice changes to pensions?

Salary sacrifice is when an employee gives up part of their salary in exchange for a pension contribution from their employer.

This arrangement is highly tax-efficient as the sacrificed salary is not subject to Income Tax or NI for either party.

Under the new rules, only the first £2,000 per year of salary sacrificed into a pension will remain free of NI.

Anything above that will attract employee NI and employers will also face higher NI costs.

While this does not limit how much can be paid into a pension, it reduces the NI advantage that salary sacrifice has historically offered.

Who will be affected by the reform?

Previous Government data estimated that around 3.3 million workers sacrificed more than £2,000 of their salary or bonuses.

However, updated OBR analysis indicated that another 4.3 million people could feel the effects.

Lower and middle earners could be disproportionately affected. Employees earning below £50,270 could face NI charges of up to 8 per cent on contributions above the cap, while higher earners would pay 2 per cent.

How will this affect your pension?

The changes may slightly reduce the efficiency of salary sacrifice, but they do not remove the main benefits of pension saving.

Pension contributions will still attract full Income Tax relief, whether made through salary sacrifice or personal contributions.

Pension contributions will continue to reduce your adjusted net income, which can help you avoid tax traps such as the £100,000 personal allowance taper and the child benefit charge.

What should you do now to prepare?

With the cap not coming into force until 2029, there is time to plan.

Many people may choose to increase their salary sacrifice contributions while the full NI relief is still available.

Others may decide to wait, especially if further policy changes are announced before implementation.

Making any sudden decisions, such as significantly reducing pension savings or retiring early to avoid the change, can have lasting financial consequences.

It can be overwhelming knowing what the right decisions are, but our professional team are here to support you.

We can assess how the salary sacrifice cap could affect your take-home pay and ensure your pension contributions align with your long-term financial plans.

With millions potentially affected, early advice can help you stay in control of your finances.

If you are unsure how the salary sacrifice changes will affect you, contact us today.