UK Entrepreneurs Plan Early Business Sales After Tax Hikes

A growing number of UK entrepreneurs are reconsidering their exit strategies due to recent tax changes, according to a survey of 4,000 UK adults commissioned by Brown Shipley, the UK wealth manager and subsidiary of Quintet Private Bank.

The research reveals that 38% of UK entrepreneurs are now planning to sell their businesses earlier than expected following tax changes introduced in the October 2024 Budget. Additionally, 44% say the increase in National Insurance will affect their business growth plans.

Market uncertainty and evolving tax policies appear to be shaping business owners’ decisions. Over 36% of respondents now intend to sell their business entirely to secure value and manage their wealth—up from 21% in January 2024.

With tax burdens rising and economic challenges persisting, more business owners are exploring exit strategies to protect their financial future.

Financial risk remains top of mind, and an increased number of business owners intend to seek external investment in their companies over the next 12-36 months to diversify their financial risk, with those figures increasing significantly since the October Budget (December 2024: 40% vs January 2024: 25%). Slightly fewer (37%) intend to seek external investment over the same period as part of their company’s strategic growth plans.

Despite UK inheritance tax changes for businesses, a third of entrepreneurs say they plan to reduce their equity in the business but keep it within the family as part of their generational wealth planning. Younger entrepreneurs are more interested in this than are older entrepreneurs (18-34: 49% vs 55+: 10%). Meanwhile, over one third of entrepreneurs (36%) have plans to reduce their ownership through internal succession to employees; similarly, this decreases with age (18-34: 53% vs 55+: 9%).

Entrepreneurs are focused on managing wealth, and confidence in financial planning increased in the last year. 54% of survey respondents reported confidence in the planning they have undertaken, with confidence higher among young entrepreneurs at 68%. That is up from 47% recorded in January 2024.

“The survey findings are reflective of conversations we are having with entrepreneurs. Confidence in the UK market is currently more challenging than it has been, and entrepreneurs are carefully assessing their options,” said Simon Smith, Head of Private Banking, South at Brown Shipley. “In addition to business sentiment, entrepreneurs are considering what inheritance tax changes will mean for the legacy of their business. This reflects the fact that preserving wealth for future generations and succession planning are often key considerations for entrepreneurs when they are looking to sell or pass on their businesses.”