By Sara Daw, CEO of The CFO Centre
For many entrepreneurs, selling a business is the culmination of years, if not decades, of hard work, risk-taking and resilience. But the financial outcome of that sale may soon look very different. Significant changes to Business Asset Disposal Relief (BADR), due to take effect from April 2026, mean that owners could walk away with considerably less than they expected.
At The CFO Centre, we work with more than 800 UK businesses, and right now we’re seeing a worrying lack of awareness about how quickly these changes will bite. Selling a business is not something you can rush through in just a few months. It requires meticulous preparation, watertight financials and a strong commercial narrative – all things that take time to build. Yet too many owners assume they can decide to sell in 2026 and still capture today’s tax advantages. In reality, many won’t even make it to market in time.
Why BADR is about to become less generous
BADR, the successor to Entrepreneurs’ Relief, has historically been one of the most valuable tax breaks available to business owners. Until fairly recently, qualifying individuals paid just 10% Capital Gains Tax (CGT) on the first £1 million of lifetime gains when selling shares in their personal company.
That favourable rate has been steadily eroded. From April 2025, the BADR rate rises to 14%. Then, in April 2026, it increases again to 18%. Meanwhile, the standard CGT rate on gains outside the BADR allowance will be 24%.
A four-percentage-point increase may not sound dramatic, but when you apply it to the sale of a company worth several million pounds, the difference can be striking with tens or even hundreds of thousands of pounds lost due to timing alone. And with the £1 million lifetime limit unchanged, many business owners will find a significant portion of their proceeds taxed at the higher 24% rate.
Why sale preparation takes time
The financial implications are clear, but the real challenge is the timescale. Preparing a business for sale is a complex and often lengthy process. Deals stall or fall through because the seller has over-estimated the company’s readiness, underestimated due diligence demands or failed to gather the financial evidence that buyers expect. A buyer will want a clean bill of financial health for the company it’s considering acquiring and this means:
- Accurate, timely management accounts
- A strong balance-sheet discipline and working-capital control
- Reliable cashflow forecasting
- Clear tax records and compliance
- Up-to-date contracts, leases and legal documentation
- Evidence of recurring revenues or long-term customer stability
- A well-defined operational structure that can survive the founder’s exit.
This is before you even reach the commercial story buyers want to see – what makes your business scalable, resilient and different from your competition? Where are your growth levers? And is your business model future-proofed against economic headwinds, shifting market dynamics and technological advancements?
Owners who haven’t already built this narrative, or put the right financial foundations in place, won’t be able to find a quick fix. These are structural improvements that often take 12–18 months to get right.
Where deals go wrong
From our work supporting both sides of transactions, we see the same friction points again and again. Disorganised financial data that slows down due diligence; forecasts that don’t stack up or lack underlying assumptions; over-reliance on the founder; unrecorded liabilities or off-balance-sheet commitments; gaps in legal or contractual documentation; and weak internal controls, especially around cash, stock or credit.”
Any of these issues can reduce valuation, prolong negotiation or cause buyers to walk away entirely.
A fractional CFO can make the difference
Many owners are now bringing in experienced transaction specialists much earlier in their journey. At The CFO Centre, our fractional CFO model allows businesses to access highly experienced CFOs – people who have led acquisitions, exits and private-equity processes – without the cost of hiring a full-time executive.
Our CFOs help businesses get ‘exit-ready’ and, because they have sat on both sides of the table, they know exactly what buyers look for and how to eliminate the friction points that slow deals down.
The tightening of BADR is a clear message to business owners that delay comes at a cost and the runway to prepare your business for sale is far longer than most people realise.
Getting your business ready for sale isn’t just about tax planning. It’s about strengthening your business to maximise value, reduce risk and ensure buyers have confidence in what they are acquiring. If you want to retain as much of your hard-earned value as possible, the time to prepare is now.
