Selling your business before April could save you a small fortune.
If you’ve been thinking about selling your business, now might be the time to act! A change to Business Asset Disposal Relief is on the horizon, and it could make a significant difference to the amount of money you keep when you sell. This blog outlines the expected changes and what you need to consider.
What is Business Asset Disposal Relief?
Business Asset Disposal Relief (BADR) – previously known as Entrepreneurs’ Relief – currently allows qualifying business owners to pay 14% Capital Gains Tax on the sale of their business.
On 6th April 2025, the government had increased the rate from 10% to 14%, and in 2026, they plan to increase this further to 18%. Those 4 percentage points means that for every £1 million of qualifying gains, you could pay an additional £40,000 in tax, just by missing the deadline.
For many owners of IT and telecoms businesses, that’s a big incentive to start conversations now, rather than later. Timing your exit carefully could make a meaningful difference to your personal finances and the legacy of the business you’ve built.
At Tech Acquisitions, we’re already speaking to business owners who want to understand how the April deadline affects their plans. We help sellers assess their readiness, understand their market value and prepare their business for sale so they can take advantage of the lower rate of Business Asset Disposal Relief before it changes.
Qualifying for Business Asset Disposal Relief
BADR exists to reward entrepreneurs and long-term business owners when they sell or dispose of all, or part, of their business. It applies to individuals, not companies, and offers a reduced rate of Capital Gains Tax at on qualifying gains, up to a lifetime limit of £1 million.
To qualify for Business Asset Disposal Relief, the business must be a genuine trading company, rather than one that primarily invests. You must have owned your shares or business assets for at least two years before the sale, and you’ll usually need to have been an employee or director during that period. For limited companies, you must hold at least 5% of the shares or voting rights. These rules are designed to ensure the relief goes to people who’ve built & actively managed their business, not passive investors.
Could you qualify – find out here: https://www.gov.uk/business-asset-disposal-relief
It’s important to note that BADR isn’t applied automatically. You must claim it through your self-assessment tax return, and the claim must be made within the HMRC deadline following the tax year of the sale. Miss the window, and your benefit could be lost entirely.
Why the April 2026 Deadline Matters
As mentioned above, from April 2026, the UK Government plans to increase the Business Asset Disposal Relief rate to 18%. For those in the IT and telecoms sector, where many businesses are built on recurring contracts, intellectual property and customer relationships, valuations can be particularly strong. That makes this a window of opportunity to secure a deal while market appetite remains high, and tax rates remain at their lowest.
However, there is a practical side to consider. Selling a business doesn’t happen overnight. Finding the right buyer, agreeing heads of terms, completing due diligence and finalising contracts can take months. Leaving it too late could mean missing the tax cut-off even if you start the process now. At Tech Acquisitions we are experts in carrying out speedy acquisitions, but we recommend starting discussions sooner, rather than later.
Beyond tax: What else to consider when selling your business
Whilst the tax deadline is an obvious motivator, it shouldn’t be the only one. The businesses that achieve the best outcomes are those that prepare thoroughly, long before negotiations begin. That could include having your financials in order, tidying up contracts, securing customer agreements and ensuring your intellectual property is documented. Buyers are attracted to well-run operations where risk is minimised, and the Tech Acquisitions team can help you put things in place to get you there.
You’ll also need a realistic valuation. Many business owners under or overestimate how much their business is worth, and often brokers can provide misleading valuations. Both can be damaging. Getting a professional valuation is essential to give you a clear picture of your position and helps you to plan and structure your exit.
Timing is everything
If you’re even thinking about selling your business in the next 12 to 24 months, come and talk to us about whether completing the sale before April 2026 could make sense for you. The process does take time, so starting now gives you a better chance of meeting the deadline without stress.
Taking the next step
At Tech Acquisitions, we work with IT and telecoms businesses, helping owners plan their exit with confidence. We understand the market, the buyers, and the nuances that make a sale successful – both financially and strategically.
If you’d like to understand how the April tax deadline might affect your plans, we’re offering a free, no-obligation business valuation and readiness review. We’ll help you assess your options, understand your valuation, and explore whether selling before next April, could be in your best interest. Get in touch with us today.
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Disclaimer: This article is for general information only and should not be taken as financial or tax advice. Business Asset Disposal Relief is subject to change and individual circumstances vary.