Business owners across Surrey are being urged to prepare for possible changes to Capital Gains Tax (CGT) ahead of the Autumn Budget in October, according to Weybridge-based accountancy firm, TWP Accounting.

The new Chancellor John Healey will deliver the Autumn Budget on 28 October and CGT is already attracting considerable speculation, with commentary suggesting that the Government could move to align CGT more closely with Income Tax rates.

Philip Munk of TWP Accounting said little is currently known about what the Budget will specifically say, but that this uncertainty is nothing new for business owners in the run-up to major fiscal events.

“At this stage, nothing firm has been announced, so all of this is conjecture,” said Philip. “However, we always see the same pattern in the weeks before a Budget.

“Similar concerns have arisen several times over the past few years and we regularly have clients asking whether they should rush through a sale.

“Given the spending commitments that the new Burnham Government are making, many expect some fairly substantial changes to taxation in the coming weeks.”

Under current rules, CGT on qualifying business assets stands at 18 per cent for basic rate taxpayers and 24 per cent for higher rate taxpayers.

Business Asset Disposal Relief offers a rate of 18 per cent on the first £1 million of qualifying lifetime gains, therefore providing a lower rate of CGT for higher rate taxpayer.

If rates were aligned with Income Tax, business owners could face rates of up to 40 per cent or 45 per cent on disposals, significantly reducing the net proceeds of any exit.

Philip explained that while speculation is widespread, very few business owners are actually in a position to complete a sale within a matter of weeks.

“For most unlisted businesses, finding a buyer and completing a sale from a standing start simply cannot happen in that timeframe,” he said.

“Where owners have already been in conversations about divesting a stake, there may be a narrow window to act, but that is the exception rather than the rule.”

Philip is instead encouraging local business owners to treat the current speculation as a prompt to prepare, regardless of what the Budget ultimately contains.

“Whether it is a future tax change, a health issue or a personal circumstance such as relocating, the reality is that these situations can arise quickly,” he said.

“Getting a current valuation, reviewing shareholder agreements and checking eligibility for reliefs such as Business Asset Disposal Relief are all things business owners can do now, long before they need to act.”

TWP Accounting is advising Surrey business owners with concerns about the upcoming Budget, or about planning an eventual exit from their business, to seek professional advice at the earliest opportunity.

To find out how TWP can help, please get in touch.