April 2026 introduces a number of significant tax and regulatory changes for UK businesses. While many companies focus on the immediate impact on cash flow, these changes can also affect company valuations, exit strategies, fundraising opportunities and succession planning. For business owners considering selling, raising investment, or planning for future growth, understanding these changes early can help protect the value of your company and support better long-term decision making. Below is a summary of the key changes and their potential impact.

Capital Gains Tax Changes

From 6 April 2026, the Capital Gains Tax (CGT) rate increases from 14% to 18%. In addition, the maximum benefit available under Business Asset Disposal Relief (BADR) is being reduced.

• CGT rises from 14% to 18%

• Business Asset Disposal Relief cap falls to £60,000 per individual (previously £100,000)

For business owners planning an exit, the increased tax rate means a larger tax bill when selling shares or business assets. While completing a sale before the changes is no longer possible, owners can still focus on exit planning strategies that improve profitability and company valuation. A stronger business performance can help offset the higher tax liability by increasing the overall sale value.

Inheritance Tax and Business Property Relief

Changes to Business Property Relief (BPR) will affect how family-owned businesses approach succession planning.

Key changes

• Business Property Relief capped at £2.5 million per individual

• Assets above the threshold receive 50% relief only, creating an effective 20% inheritance tax charge

Impact on business succession

Family businesses may face larger inheritance tax liabilities when ownership passes to the next generation. Business owners should review their ownership structures and succession plans to ensure beneficiaries have a clear strategy to manage any inheritance tax obligations without disrupting the company.

Equity Fundraising Opportunities

There are also changes affecting equity investment schemes, which may create new opportunities for companies seeking external funding.

Key changes

• EIS and VCT annual investment limits increase to £10 million

• Lifetime limits rise to £24 million

• VCT income tax relief falls from 30% to 20%

Opportunity for businesses

Private equity and institutional investors continue to have significant capital available to deploy. As investment limits increase, equity fundraising may become an attractive option for scaling businesses.

Many sectors are also experiencing increased consolidation, with private equity firms acquiring larger platform businesses and rolling up smaller companies. This trend may create new exit opportunities for business owners.

FRS 102 Accounting Changes

New accounting rules under FRS 102 will require companies to recognise operating leases on the balance sheet as right-of-use assets.

Key impacts

• EBITDA figures may increase

• Net debt levels may also rise

• Gearing ratios could change significantly

What this means for valuations and funding

These changes can affect how lenders and investors assess your financial position.

Potential consequences include:

• Funding covenant breaches

• Adjustments to valuation multiples

• Increased scrutiny during due diligence

Companies should consider engaging with lenders early and preparing restated financials ahead of any investment or sale process.

Wage and Cost Pressures

Operating costs are also increasing in April 2026, particularly for businesses with large workforces.

Key changes

• National Living Wage increases to £12.71 per hour (+4.1%)

• 18–20 wage rate rises by 8.5%

• Commercial business rates increases in many regions

Impact on company valuations

Rising employment and operating costs may reduce profit margins, which can directly affect earnings-based valuations and debt affordability assessments.

Business owners should focus on:

• Efficient cost management

• Strong credit control processes

• Minimising exposure to bad debts

Employment Rights Act 2025

The Employment Rights Act 2025 introduces new worker protections that businesses must prepare for.

Key changes

• Unfair dismissal protection from six months of service (previously two years)

• Removal of the compensation cap

• New rights covering:

  • Guaranteed hours

  • Flexible working

  • Harassment prevention

Due diligence implications

When businesses are sold, buyers will increasingly expect robust HR policies, documentation and compliance systems. Companies without strong HR governance may face greater scrutiny during due diligence, which can affect deal timelines or valuation.

Income Extraction and Dividend Tax Changes

Business owners also face changes affecting how they extract income from their companies.

Key changes

• Dividend tax rates increase by 2% for basic and higher-rate taxpayers

• Personal allowance thresholds remain frozen, creating continued fiscal drag

Planning considerations

Business owners should review their income extraction strategies, particularly when planning a future exit. It is also important to consider how assets will be treated during a business sale and the most efficient way to remove or restructure them ahead of a transaction.

Planning Ahead

The April 2026 tax and regulatory changes highlight the importance of proactive financial planning for UK businesses. From tax liabilities and funding options to employment law and accounting changes, these developments can influence company valuation, investment potential and exit outcomes. Business owners who review their strategies early can identify opportunities, minimise risks and position their companies more strongly for future growth or sale.

More Information

These changes will require careful planning to maximise opportunities and reduce potential risks. If you would like to discuss how these changes may affect your business, please contact your usual adviser to explore the options available to support your company through these developments.