05/11/2024
What does Rachel Reeves' budget mean for UK business buyers and sellers? We'd love to hear your thoughts. Here are the key points…
The budget introduces several changes that WILL impact UK business buyers and sellers:
- Increased Capital Gains Tax (CGT): The lower CGT rate has risen from 10% to 18%, and the higher rate from 20% to 24%. This means sellers will now pay more tax on the proceeds when disposing of a business.
- Adjustments to Business Asset Disposal Relief (BADR): While the £1 million lifetime limit for BADR remains, the tax rate on qualifying gains will increase to 14% in April 2025 and to 18% in April 2026. This reduces the effective ‘entrepreneur’s relief’ and again increases the pay due upon the sale of a business.
- Employer National Insurance Contributions (NICs): Employer NICs will rise by 1.2 percentage points to 15% from April 2025, and the threshold at which employers start paying NICs will decrease from £9,100 to £5,000 per year. This increases the cost of employment for businesses.
Is there an upside? Well, the budget includes a 40% relief on business rates for retail, leisure, and hospitality businesses in 2025-26, up to a maximum discount of £110,000 per business. This will provide some financial relief for businesses in these sectors.
How do you think these changes will affect your business decisions? Share your views in the comments below.
