BADR Rate Rise April 2026: £40,000 More Tax per Exit
BADR rises from 14% to 18% on 6 April 2026. We analysed 3.4M UK companies to find how many owners can exit before the deadline. Most can't.
BADR rises from 14% to 18% on 6 April 2026. We analysed 3.4M UK companies to find how many owners can exit before the deadline. Most can't.
On 6 April 2026, the Capital Gains Tax rate on qualifying business disposals rose from 14% to 18%. On a £1 million gain, that's £40,000 more in tax than three weeks ago. On the full lifetime allowance, the maximum BADR saving has fallen from £140,000 (at the old 10% rate) to £60,000 today.
Every accountant in the country spent the first quarter of 2026 telling their clients to complete before 5 April. Most didn't. We analysed our database of 3.4 million UK companies to see how many owners are now in the 18% era without a plan — and what the data says they should do next.
Business Asset Disposal Relief — formerly Entrepreneurs' Relief — gives qualifying business disposals a reduced Capital Gains Tax rate up to a £1 million lifetime cap. Until April 2025 that rate was 10%. From April 2025 it rose to 14%. From 6 April 2026 it is 18%. The lifetime limit remains £1 million. The standard CGT rate, for comparison, is 24% for higher-rate taxpayers.
The numbers in plain English:
| Qualifying gain | At 10% (pre-April 2025) | At 14% (2025/26) | At 18% (from April 2026) | At 24% (no BADR) |
|---|---|---|---|---|
| £250,000 | £25,000 | £35,000 | £45,000 | £60,000 |
| £500,000 | £50,000 | £70,000 | £90,000 | £120,000 |
| £750,000 | £75,000 | £105,000 | £135,000 | £180,000 |
| £1,000,000 | £100,000 | £140,000 | £180,000 | £240,000 |
A business owner who completed a £1 million sale in March 2026 paid £140,000 in CGT. The same sale completed today costs £180,000. The £40,000 difference is real — but the more important number is the one most coverage of the rate change has missed: the maximum tax saving BADR delivers, relative to the standard CGT rate, has fallen from £140,000 (under the 10% regime) to £60,000 today. The relief has lost more than half its value in two years.
Industry brokers consistently cite 6–12 months as the typical timeline for an SME sale from preparation to completion. Some put it closer to 9–12 months. Complex deals routinely run to 18 months. That timeline includes valuation, marketing, buyer identification, due diligence, legal negotiation, and completion — and anti-forestalling rules mean that exchanging contracts early didn't lock in the lower rate if completion happened after 5 April. The disposal had to actually complete.
In practice, the 14% window was already shut by the second half of 2025 for any owner who hadn't started preparing. By the time most articles were written warning of the "April 2026 deadline," the deadline was already past for everyone who needed to hear about it.
The scale of the problem is visible in our data. Across 3.4 million active UK companies:
These are businesses where a BADR-motivated sale would have made financial sense. The majority have no broker, no buyer, and no process underway. They were never completing before April 2026 — and most weren't completing before April 2025 either. The fuller demographic and succession picture shows just how broad the cohort is — and that the demographic clock isn't slowing.
Three groups locked in the 14% rate:
The first were owners already in advanced negotiations by autumn 2025 — heads of terms agreed, due diligence underway, legal documentation moving. Their advisers were managing the timeline against the deadline.
The second were owners selling to a family member, management team, or existing employee. These deals can move faster than third-party sales because the relationship and broad terms are already known.
The third were owners winding down a company through a Members' Voluntary Liquidation, where the process can be tighter than a trade sale and the distribution treated as a capital event.
Everyone else — the vast majority of owners contemplating an exit — is now in the 18% era.
The advisory industry's framing through Q1 2026 was "act before April." That was correct advice for the small minority who could realistically act. For everyone else — the structural majority — the relevant calculation has shifted.
The new question isn't "should I have completed in March?" It's "what's the cost of waiting another year?"
Three things to weigh:
One: 18% is still better than 24%. On a £1 million gain, BADR at the new rate saves £60,000 versus paying full CGT. That's smaller than the £140,000 it saved at 10%, but it's not nothing. Owners who qualify should still claim it.
Two: the relief may not survive the next Budget cycle untouched. The pattern is unmistakable. The Entrepreneurs' Relief lifetime limit was cut from £10 million to £1 million in 2020. The relief was rebranded as BADR in 2024. Investors' Relief had its lifetime limit slashed from £10 million to £1 million in the same year. The BADR rate has moved from 10% to 14% to 18% in two years. We won't predict specific future policy, but every Budget has narrowed this relief, and an owner who delays another five years is making a significant bet that the next narrowing won't be the one that matters to them.
Three: the deal timeline is the binding constraint, not the tax rate. A sale that takes 12 months to close means the planning that delivers an exit in 2027 starts now. Owners who use the missed deadline as another reason to delay are most likely to be the ones still running their business at 70 with no succession path — the cohort our data shows is already the largest single risk pool in UK SMEs.
Of the 45,964 UK companies our model identifies as exit-ready — scoring 70 or above with total assets above £100,000 — the majority are trading businesses likely eligible for BADR. The main exceptions are property holding companies and pure investment vehicles, which generally don't qualify for the relief and which we suppress from search results regardless.
These 45,964 companies hold £111.9 billion in aggregate total assets. Almost none completed a sale in March 2026. Almost all of them still need to transition eventually — and every year they delay, the owner gets older, the tax bill structurally widens, and the business becomes harder to transfer.
The most concentrated risk sits at the older end. 116,935 companies have a sole director in their 70s, collectively holding £45.9 billion in total assets. For these owners, the conversation isn't a five-year horizon. It's now — and the 18% rate is still considerably better than the 24% they'll face if BADR is narrowed further.
For search fund operators, ETA practitioners, and acquirers, the post-April 2026 environment creates a specific opening.
Owners who missed the window have just received a concrete reminder that the tax environment is moving against them. Many had been putting off succession for years — and each rate rise makes the cost of further delay tangible. That changes the psychology of a first approach.
The owners who rationally should sell now are the ones who:
Our data shows where exit-ready businesses cluster. The sectors with the densest concentrations of exit-ready companies are specialised construction, office administration, management consultancy, and human health services. Geographically, the most concentrated regions are Essex, Kent, Surrey, Hampshire, and the West Midlands.
If you're a buyer, the businesses that missed the 14% window are now your primary pipeline. They didn't get the advisory-industry urgency conversation in time. They will get it from a future Budget. The owners who hear that conversation early — through a credible, well-prepared first approach — are the ones who eventually transact.
The headline "sell before April" stopped being actionable months ago. The more important takeaway is structural: the tax environment for UK business exits is materially worse than it was two years ago, the relief is half as valuable as it was, and the demographic clock isn't slowing.
If you're a UK business owner aged 55 or above, the best time to start planning was five years ago. The second best time is now — not because of a specific deadline, but because every year of delay narrows your options, raises your tax bill, and shrinks the pool of buyers willing to underwrite a transition.
If you're an acquirer looking at the UK market, the data shows where the opportunity sits. Over 62,000 companies are showing clear exit signals today. Most of their owners haven't started planning. The businesses exist. The question is whether you find them before they disappear from the market entirely — and on the most reliable estimates, 92% of UK business exits are closures rather than transfers.
*This analysis is based on ExitRadar's database of 3.4 million active UK companies, derived from public Companies House filings. Financial figures are drawn from the most recently filed accounts. This article is not tax advice — business owners should consult a qualified tax adviser for guidance on their specific situation, including BADR eligibility, anti-forestalling rules, and timing of disposals.*
*ExitRadar analyses public UK company data to identify businesses showing succession and exit signals. See how our scoring model works in How We Identify 45,964 Exit-Ready UK Businesses, or explore the UK Exit Readiness Map to see where exit-ready businesses cluster by region.*