Entrepreneur Tax & Business Asset Disposal Relief

Our team of expert tax accountants are here to help you navigate the world of entrepreneur tax, accounting and business asset disposal relief.

We’ll make sure that you are fully aware of your tax allowances and reliefs that you are entitled to, helping you to save money and ensure you pay the right tax and avoid any unnecessary fines and penalties. 

When it comes to the complex world of tax, it can be easy to get lost or even take the wrong step when trying to work out what you owe and what you’re entitled to. 

As an entrepreneur, you’ll spend your time wearing myriad hats within your business or businesses. When it comes to taxes, why not leave this job to professionals to ensure all available tax reliefs are unitised and you are as tax efficient as possible?

When it comes to entrepreneur tax, our team are on hand to help you: 

Business Asset Disposal Relief (formerly known as Entrepreneurs’ Tax Relief) is for any business assets such as shares in your company, partnerships or any assets used for or in your business. 

It was initially created to incentivise businesses to continuously invest and grow. For those who are eligible, BADR can help you pay less Capital Gains Tax when selling all or part of your business.  

Business Asset Disposal Relief needs to be actively claimed, so it is helpful to have an entrepreneur tax specialist accountant to help you do so.

To see if you could benefit from Business Asset Disposal Relief, get in touch with our team. By better understanding your business assets, we’ll be able to inform you as to whether you qualify.   

As a business owner and entrepreneur, you’ll often have to face the sale of assets in order to continue to invest and grow your business. With this comes the need to pay Capital Gains Tax.

Some other key points to consider as an entrepreneur is that the current 2024/25 CGT tax-free allowance is £3,000 for individuals. 

The rates for non-residential assets were lower prior to the Budget on 30 October 2024 (10% and 20% respectively).

For businesses, Business Asset Disposal Relief allows you to pay a reduced 10% rate on qualifying disposals, up to £1 million (lifetime limit). However, Capital Gains Tax is not automatically deducted, so it’s important you report and pay this yourself. 

Be aware that these (BADR) rates are scheduled to increase from April 2025 to 14% and then to 18% from April 2026. This is why it is highly recommended to invest in a tax accountant who can help keep up with constant tax changes and advise on the best course of action. 

This relief reduces the amount of CGT on the disposal of shares in a trading company where it is not listed on a stock exchange. Investors Relief applies to shares issued on or after 17.03.2016 that are subsequently disposed of on or after 06.04.2019. This applies subject to the shares being owned for at least three years up to disposal date. 

It is not typically available if you or a person connected to you is employed by the company. The benefit of this relief is that qualifying CGT for every individual is subject to a £10 million lifetime limit (much greater than BADR).

Business Asset Disposal Relief, formerly known as Entrepreneurs’ Relief, allows eligible business owners to (currently) pay a reduced 10% Capital Gains Tax rate on qualifying disposals, up to a lifetime limit of £1 million.

To qualify, you must have been an employee or office holder of the company for at least 2 years up to the date of sale, own at least 5% of shares and voting rights, and the company must be a trading company or holding company of a trading group.

Key taxes for small businesses include Corporation Tax, Value Added Tax (VAT), National Insurance contributions, and business rates. Self-employed individuals also need to pay Income Tax through Self Assessment.

The Enterprise Investment Scheme (EIS) and Seed Enterprise Investment Scheme (SEIS) offer tax reliefs to individuals investing in qualifying companies, including income tax relief and potential Capital Gains Tax exemptions.