Growing concerns about tax rises have led almost 30% of entrepreneurs in Britain to accelerate plans to sell their businesses, according to new analysis from asset manager Evelyn Partners.
The survey, conducted among 500 business owners with a turnover of at least £5 million, found that 29% of respondents had accelerated their plans to exit their business in the past year, with 23% citing fear of higher capital gains tax as the main reason . factor.
The findings come as the government continues to hint at tax increases ahead of the October 30 budget. Labor leader Sir Keir Starmer has also suggested that wealthier individuals and companies could face a heavier tax burden to help manage Britain’s challenging financial situation.
Laura Hayward, tax partner at Evelyn Partners, said business owners are increasingly “on edge” over concerns about potential changes to capital gains tax and inheritance tax. She noted that many entrepreneurs want to secure the value of their businesses before adverse tax changes take effect.
“The business environment for many owners has been difficult enough in recent years as they have worked to rebuild from the pandemic amid cost-of-living pressures and high inflation,” Hayward said. “With the potential for adverse tax changes in the upcoming Budget, it is understandable that some will want to realize the fruits of their hard work sooner rather than later.”
The analysis also coincides with a decline in both business and consumer confidence. The Institute of Directors’ economic confidence index fell sharply from -12 in August to -38 in September as business leaders expressed concerns about the tax burden. In addition, the GfK consumer confidence index fell from -13 in August to -20 in September, with more people reporting a less optimistic view of their personal finances and the economy in general.
As the budget date approaches, businesses are preparing for possible changes, hoping for clarity on how new tax measures could impact their plans for growth, investment or the sale of their business.