Andy Parker our Head of Corporate Finance at Cooper Parry wrote recently that uncertainty itself is a reason to act. We now have a date for the budget and that reinforces the question business owners should be asking.
Back in July, even before Andy Burnham had walked through the door of Number 10, Andy Parker made a point I keep coming back to: the biggest risk for business owners isn’t tax change itself. It’s waiting passively and hoping for clarity.
Nobody then knew when a Budget would land, or what would be in it.
We now know the answer to one of those questions. John Healey has confirmed his first Budget for Wednesday 28 October. The earliest Autumn Budget since 2021, and by most readings a deliberate move to cut short speculation.
So the question shifts. Not only “should I be thinking about this?” but also “what needs to be settled before the end of October?”
What tax changes are being proposed
CGT moving closer to income tax rates.
This is the live one. Burnham said in June he’d look “in detail” at it. Nothing formal has been published, but advisers are already reporting more owners bringing transactions forward.
And this wouldn’t be a departure. Business Asset Disposal Relief has already gone from 10% to 14% to 18% across two Budgets, with barely a headline either time. The direction of travel is set – October is a question of pace, not principle.
There’s a real counterargument the Treasury will be weighing – push CGT too close to income tax and owners simply stop selling. Higher rates on far fewer deals isn’t an obvious win.
Corporation tax.
Never covered by the 2024 manifesto pledge and not protected since.
A 50p top rate.
Floated, not committed. It raises roughly £1bn against a gap north of £22bn, so the arithmetic tells you more than the noise does.
A wealth tax.
Burnham has said it isn’t an immediate priority. He hasn’t ruled it out. Those aren’t the same thing.
The bit most commentary gets wrong
A move before the Budget is unlikely. Major tax changes need an independent forecast alongside them, and that takes weeks to prepare. Things are still being announced outside the Budget but look at the pattern: giveaways go out as they’re ready, revenue raisers wait for the fiscal event.
If CGT moves on 28 October, expect it to bite from Budget day. Not the following April. This is the one that catches people out. The assumption that an autumn announcement buys you until the end of the tax year is comfortable, and it has been wrong before.
How much do you need to sell?
In his July article, Andy Parker explained the arithmetic more clearly than most. On a £10m gain, if CGT went to 45%, you’d need around £13.8m of gain to end up in the same position after tax. Nearly 40% more value, just to stand still.
Can your business realistically create that in the time available? For some, yes. For plenty of others the honest answer is no.
There’s a prior question to address. It’s where we spend most of our time with business owners, working through the bigger picture before anyone gets near a transaction.
Not the headline valuation, but the figure that actually reaches you after tax, and what it needs to fund. The way you want to live. What you’d like to pass on. Whatever you plan to do next.
Work out what that net sum needs to be, then hold it against what a sale today would deliver.
Most owners who do that exercise get a surprise. The number they’d be genuinely comfortable with is well below the number they’ve been holding out for.
Because the bigger figure is usually an abstraction – a multiple, a round number, something a competitor supposedly got. It isn’t attached to anything you actually want to do. People spend years chasing it without asking what the extra would change about their life.
If today’s net clears your number, waiting isn’t a strategy. It’s a deferral.
And it isn’t free. Every year you hold on, you carry the trading risk, the market risk, the customer concentration, the chance that the person the buyer really wants decides to leave. Multiples move. Sectors fall out of favour. Buyers who are keen today may not be next year. A tax rise is one item on that list, and not the largest.
If today’s number falls well short of what you need, that’s different. Accelerating a deal to save tax would lock in an outcome that doesn’t do the job. But that’s the smaller group. Far more common is the owner sitting on a business that would already fund everything they want, waiting on a figure they’ve never really interrogated.
The arithmetic tells you what standing still costs. Your number tells you whether standing still was ever the point.
Questions to answer before the Autumn Budget
Three questions worth working through:
- Do you know your number, and does a sale at today’s rates get you there?
- Is the deal commercially ready, independent of the tax position?
- If the answer is “wait”, what are you waiting for, and what does being wrong cost?
And a third-party sale isn’t the only route:
- Succession to family move shares to the next generation without putting the business on the market
- Management buyout or employee ownership reward the people who built it, on a timetable you control
- Partial exit take money off the table, keep the upside. There’s real capital looking for good businesses right now
Most of these need some restructuring first: share classes, separating trading from investment assets or property, a holding company, the right protections around a family shareholding.
They also aren’t only end points. A partial exit or a share transfer to management can be a deliberate first step towards a full sale later. Banking part of the value now, at today’s rates, while leaving the bigger transaction open.
Which is why this is rarely just a deal question. The structure, the tax position, what you end up with and what it then has to do for you are one decision, not four. They work best when the corporate finance, tax and wealth advice happens in the same room rather than in sequence.
All of it takes time. None of it is a decision for the fortnight after a Budget.
The owners best placed for whatever lands on 28 October won’t be the ones who guessed right. They’ll be the ones who already knew what they’d do either way.
If a sale, restructuring or succession is realistically in view over the next 12 to 18 months, it’s worth a conversation well before late October. Get in touch.
