The Autumn Budget 2026 and Your Business Sale: What You Need to Know Before 28 October
The Autumn Budget on 28 October 2026 is one of the most consequential fiscal events in years for business owners considering a sale. It is Chancellor John Healey’s first Budget, the first under Andy Burnham’s premiership, and it arrives against a backdrop of significant public finance pressure and mounting speculation about further changes to capital gains tax. If you are thinking about selling your business, or are already in the early stages of a process, what happens on 28 October could materially affect the net proceeds you receive.
This post sets out what we currently know, what is being speculated about, what the practical implications are for business owners, and what you should be thinking about in the time that remains before the Budget is delivered.
What Is Being Speculated
Chancellor Healey has declined to comment on specific tax changes ahead of the Budget, stating he will not respond to speculation. That is the standard pre-Budget position and tells us nothing either way about what is actually being planned. What we can assess is what is being seriously discussed and why.
Capital gains tax is the area attracting the most attention. Two changes in particular are being widely cited.
The first is a further increase in CGT rates, potentially aligned more closely with income tax rates. The most radical version of this, first floated publicly by Wes Streeting during his leadership campaign in May 2026, would introduce three bands of CGT at 20%, 40% and 45%, calculated by combining an individual’s annual income and their capital gains. Under that structure, a higher rate taxpayer selling a significant business would face a CGT bill at rates indistinguishable from income tax on the gain above the basic rate threshold. Income tax and CGT alignment has been a desire for multiple governments and this is not necessarily unique to Labour. For a business owner realising a gain of 1 million pounds, the difference between paying CGT at 24% and paying at 40% is 160,000 pounds in additional tax. On a 2 million pound gain, the difference is 320,000 pounds.
The second is a further reduction in BADR. The relief has already been significantly eroded. The lifetime limit fell from 10 million pounds to 1 million pounds in 2020. The rate has risen from 10% to 18% over the past two years. Both parameters remain candidates for further change: the limit could be further reduced or abolished entirely, and the rate could be brought closer to the main CGT rate, reducing or eliminating the practical benefit of the relief.
There is also speculation around further tightening of the eligibility conditions for BADR and increased HMRC scrutiny of qualifying claims. This is not a rate change but can be equally damaging if you are relying on BADR to apply to a transaction and find post-sale that your claim is challenged.
What This Means for Business Owners
The key practical question for any business owner considering a sale is: does the Budget change my position, and if so, by how much and what can I do about it?
There are a few distinct scenarios worth thinking through.
If you are already in a late-stage sale process and a realistic completion date before 28 October, you are largely insulated from the Budget. Any changes to CGT rates announced on Budget Day typically apply from the date of announcement or from the start of the following tax year, though the 2024 Budget established that immediate effect from announcement day is possible. Your adviser should be tracking completion timing closely.
If you have an agreed deal that is likely to complete after 28 October, the picture is more uncertain. Anti-forestalling rules introduced alongside previous CGT changes have been designed to prevent sellers from using early unconditional contracts to lock in lower rates. If you exchange before the Budget but complete after, the disposal date for CGT purposes will generally be treated as the completion date, meaning any new higher rates would apply. The exact rules will depend on what Healey announces, but assuming you can exchange before 28 October and thereby lock in current rates is not a safe planning assumption.
If you are in early-stage conversations or have not yet formally launched a process, you face a more straightforward calculation. If rates rise materially on 28 October, a process that might have taken six to twelve months from today is going to complete in a higher-tax environment. Whether to accelerate, hold, or proceed at a normal pace depends on your specific circumstances, the gap between current and potential future tax rates applied to your expected gain, and whether the tax tail is wagging the commercial dog.
That last point matters. A business sale is not a decision to make purely on the basis of the prevailing CGT rate at any given moment. If your business is not ready for sale, if the market conditions in your sector are not favourable, or if you have not yet achieved the earnings growth needed to achieve a strong valuation, selling before the Budget in a rushed or underprepared process is likely to cost you far more in valuation than it saves in tax. The numbers need to stack up on both sides of the calculation.
What the M&A Market Is Doing
The speculation around tax changes has had a visible effect on deal activity. Business owners who have been considering an exit have been bringing those conversations forward, trying to either complete transactions before 28 October or at least reach a position where they understand their options before the Budget changes the landscape.
For the UK SME M&A market more broadly, 2026 has been characterised by a tension between available buyer capital, which remains substantial, and seller hesitancy driven partly by valuation uncertainty and partly by exactly this kind of tax-driven deliberation. The SME segment remains active, with domestic transactions continuing to dominate volumes and PE-backed consolidators maintaining strong acquisition appetite in fragmented sectors including healthcare, childcare, and professional services.
The practical consequence for sellers is that the market remains supportive. Buyers are not disappearing because of the Budget. What is shifting is the urgency on the seller side, and that urgency needs to be managed carefully rather than allowed to drive decision-making into territory that is commercially counterproductive.
What You Should Actually Do
The most useful framing for most business owners is not “should I rush to sell before 28 October” but “what does my position look like under the range of plausible Budget outcomes, and am I comfortable with each of them.”
If the answer to that question is that a material CGT increase would significantly change your exit calculations, and you are already at a stage where a sale in the next six to twelve months is a realistic ambition, it is worth having a proper conversation now rather than waiting until after the Budget to assess your options. That conversation does not commit you to a process. It gives you information.
If you are already in a process, you should be having a specific conversation with your adviser about completion timing and what the exposure looks like under different Budget scenarios. That is not speculation, it is prudent planning.
If you are years away from a sale, the Budget matters less in the near term. CGT rates may change again between now and whenever you actually exit, in either direction. Locking in long-term decisions based on near-term tax speculation is rarely the right answer.
What the Budget has definitively done, even before a single announcement has been made, is serve as a reminder that the tax environment on exit is not fixed and is not improving. BADR was once a 10% rate on 10 million pounds of gains. It is now an 18% rate on 1 million pounds. Whether or not Healey makes further changes on 28 October, the direction of travel over the past several years has been consistently towards higher taxes on business disposals. That is the backdrop against which any realistic exit planning needs to take place.
The Anti-Forestalling Risk
One point that deserves specific attention is the anti-forestalling rules, because there is a significant misconception among sellers about what these do.
Anti-forestalling rules are designed to prevent sellers from accelerating a transaction in order to lock in a more favourable tax rate. When the 2024 Budget increased CGT rates with immediate effect from announcement day, the legislation included provisions that looked through certain arrangements designed to sidestep the change. Similar provisions accompanied the BADR rate increases from April 2025 and April 2026.
If Healey announces a CGT change on 28 October, it is entirely possible that the new rates apply from that date, and that any unconditional exchange entered into shortly before the Budget in an obvious attempt to avoid the higher rate may be subject to challenge. This is not a hypothetical risk: it is a documented feature of how recent CGT changes have been legislated.
The practical implication is that any planning around the Budget date needs to involve specialist tax advice, not just an accelerated timeline. Getting exchange done before 28 October is not automatically a safe harbour. The facts and circumstances matter, and the structure of the transaction matters.
Disclaimer: This post is intended for general information purposes only and does not constitute tax advice. No reliance should be placed on the content of this post. All deals and individual circumstances are unique and what applies in one situation may not apply in another. You should always seek independent professional advice tailored to your specific circumstances before making any decisions about the timing or structure of a business sale.
If the Budget has prompted you to think more seriously about your exit options, an early conversation costs nothing. Get in touch and we can talk through your position in confidence.
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Frequently Asked Questions
Will CGT definitely increase in the Budget?
No one knows. Chancellor Healey has declined to comment on pre-Budget speculation, which is the standard position. CGT is one of the areas most frequently cited as a potential source of additional revenue, and the political and fiscal circumstances make it a plausible target. But Budgets regularly disappoint or surprise on individual measures, and decisions based purely on speculation carry their own risks.
If CGT rates go up, will that affect my BADR claim?
Not necessarily directly. BADR is a specific relief with its own rate, currently 18%. If the Budget increases main CGT rates without touching BADR, your BADR-eligible gains benefit from the existing relief. However, if the Budget reduces the lifetime limit further or increases the BADR rate itself, your position changes. Both are being speculated about.
Can I exchange before 28 October to lock in current rates?
Possibly, but the anti-forestalling rules make this more complex than it sounds. Whether an exchange before the Budget protects your position depends on the specific legislation that accompanies any announced changes, and on the facts of your transaction. Specialist tax advice before taking any action is essential.
Is now a bad time to be selling my business given the tax uncertainty?
Not necessarily. Buyer appetite remains strong and market conditions in most SME sectors are supportive. The question is whether the commercial logic of a sale stacks up independently of the tax calculation. If it does, the tax planning around timing is a secondary optimisation. If the only reason to sell now is the tax rate, that is a weaker basis for a significant decision.
What happens if I start a process now and the Budget increases CGT before I complete?
You would pay tax at whatever rates apply on your completion date. A process started today is unlikely to complete before 28 October. If you are already in a process, speak to your adviser about whether there is a realistic path to completion before the Budget and what the exposure looks like if that does not happen.