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Newspage RawSource: Scott Gallacher, Rowley Turton

Thirty years building a business for less than £1,000 a year in tax relief?

ended 07. November 2026

Scott Gallacher, Chartered Financial Planner at Rowley Turton, believes the latest Budget changes to Business Asset Disposal Relief (BADR) raise serious questions about how Britain rewards entrepreneurs.

The reduction in the lifetime BADR allowance from £1m to £500,000 means business owners could now save a maximum of just £30,000 in CGT vs up to £100,000 under the former 10% Entrepreneurs' Relief.

Even that £30,000 isn't guaranteed as the BADR uses up the basic-rate CGT band first. As the normal CGT rate within that band is also 18%, there's no additional saving on that portion of the gain.

For someone who has spent over 30 years building a business, that's potentially less than £1,000 a year in tax savings, compared with over £3,300 under the previous regime.

That's 30 years of taking financial risks, employing people, paying taxes and making personal sacrifices. Is this really how Britain wants to reward entrepreneurship?

Questions for Newspagers

  1. Has BADR become a tax incentive in name only, with a maximum saving of just £30,000?
  2. Is potentially less than £1,000 a year in tax savings a meaningful reward for someone who has spent over 30 years building a business?
  3. Could the erosion of BADR discourage entrepreneurs from starting businesses, investing in them or continuing to grow them?
  4. Should the government restore more generous tax relief for long-term business owners?

6 responses from the Newspage community

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Scott GallacherVerified
Director at Rowley Turton
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As an incentive or reward for entrepreneurship, BADR is no longer fit for purpose.

That said, I doubt reducing the relief will discourage many people in the UK from starting a business or investing in one. Entrepreneurs don't generally take those risks because of the tax relief they might receive decades later.

However, I've advised clients who specifically moved to the UK to establish businesses because it offered a more attractive environment than their home countries. In an increasingly competitive international market, reducing incentives hardly helps Britain attract the next generation of entrepreneurs.

When the Chancellor repeatedly tells us that economic growth is the priority, reducing the rewards for building a successful business hardly seems consistent with that ambition.
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Riz MalikVerified
Independent Financial Adviser at R3 Wealth
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We need to be much more pro SME in this country, but increasingly it feels as though we are moving in the opposite direction. What often gets lost in the debate is the risk entrepreneurs take to build those businesses. Many underpay themselves for years, put the business first and sacrifice income today in the hope of a liquidity event tomorrow. For many, that event never comes. The difficulty is getting policymakers, many of whom have never run a business themselves, to fully appreciate the reality and risk of entrepreneurship.
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Tony RedondoVerified
Founder at Cosmos Currency Exchange
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This government speaks with a forked tongue. Growth is the number one priority, we’re told, and the Chancellor now wants to talk to Britain’s bloody-minded entrepreneurs, yet every action curtails incentive. BADR is the latest casualty: an 18% rate on a £500,000 lifetime cap saves just £30,000 against the 24% main rate, an incentive in name only. For a founder with three decades of personal guarantees and unhedged risk, that’s about £1,000 a year. A mockery of the risk-reward ratio, pushing capital to lower-CGT jurisdictions and locking founders in, stalling succession and growth. Treasury should offer sliding-scale relief tied to holding periods and job creation, restoring the line between passive gains and active entrepreneurial risk. But as Andy Haldane says, they are too economically lightweight to grasp the consequences.
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Tony RestellVerified
Founder and Director at Social-Hire.com
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I was fortunate enough to sell a business that was subject to the original Entrepreneurs' Relief. Alongside the favourable treatment of dividends at the time, that made the risk of resigning from a career in strategy consulting and launching a dotcom business worthwhile. If the younger me were facing the tax regime in place today, I would almost certainly move abroad and launch a business there instead. It's a sorry time to be an aspiring entrepreneur in the UK today.
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Paul DenleyVerified
CEO at Oakham Wealth Management
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The greatest frustration is that Britain should be doing everything possible to encourage entrepreneurship, especially as starting and growing a business is already harder here than in countries such as the US.

Building a successful business takes years, often decades, of financial risk, personal sacrifice and hard work, and tax incentives should at least recognise that commitment.

But an incentive only matters if entrepreneurs can expect it to still exist when they sell. Why would anyone starting a business today value a relief that may have vanished in a few years?

The erosion of BADR is damaging, but the constant rule changes are arguably worse. Entrepreneurs need confidence and stability, not a moving target. The government should restore meaningful relief and commit to maintaining it for the long term.
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Harvey DhillonVerified
Founder & CEO at Zmartly
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BADR is now a poor reward for a lifetime spent building a business, but for most owners halving the cap isn't what shrank it. HMRC expects most claimants to keep relief on their whole gain; what cost them was the relief's own rate rising towards the normal rate. The new cap only applies to sales from 6 April 2027, so an owner whose sale completes before then can still save up to £60,000. It isn't an incentive in name only, but it's a much thinner one. That might put a few off starting or growing a business, but the hard years come long before any sale. My firm wasn't profitable for its first four years, and I put my own savings in until I ran out of cash. Relief should be restored by cutting the rate for the long-term owner of an ordinary firm. Budget 2026 also plans a richer Founders' Relief for fast-growing companies, which HMRC expects about 600 people a year to qualify for. That moves the reward from the ordinary owner to a select few. That's the wrong way round.