BADR Changes April 2026: What Electrical Business Owners Should Know

Business Asset Disposal Relief, formerly known as Entrepreneurs' Relief, provides a reduced rate of Capital Gains Tax, the tax on the gain you make when you sell something, on qualifying gains when you sell a qualifying business. For electrical business owners considering a sale, the changes to BADR rates are worth understanding in practical terms.

I want to be clear upfront: this article provides general context, not tax advice. Before making any decision with tax implications, you should take independent advice from a qualified tax adviser or accountant who understands your specific circumstances.

What Changed and When

The BADR rate on qualifying gains was 10% until April 2025. It increased to 14% from April 2025, and it rose again to 18% in Apr 2026. The standard CGT rate for higher and additional rate taxpayers sits higher than this, so BADR continues to provide a meaningful relief even after the April 2026 change.

The rate has gone up in steps, and the rate a sale pays is fixed by the date the sale contract is made, not the completion date. On a qualifying gain of £1m or more, the difference between 14% and 18% is £40,000.

Does Your Sale Qualify for BADR

BADR applies to gains from selling all or part of a qualifying trading business, or shares in a qualifying company. There are conditions around how long you have owned the business, your involvement in it, and the nature of the business itself. For most owner-managed electrical contracting businesses, these conditions are likely to be met, but your accountant should confirm your specific position.

There is a lifetime allowance of £1 million on which BADR can be claimed. Gains above that threshold are taxed at the standard CGT rate.

What This Means for Timing

A typical electrical business sale takes six to nine months from first conversation to legal completion. That is not a fixed figure and it varies based on the complexity of the business, the due diligence process (the buyer's detailed check of the business), and how quickly buyer and seller can move through the legal stages. Some deals complete faster; others take longer.

What this means in practical terms is that the April 2026 date has now passed: sales going through today pay 18%, and because the rate follows the date the sale contract becomes binding rather than the day the money arrives, any future change will reward the same early planning.

This is not a reason to rush a sale that is not ready. Completing a poorly prepared transaction to beat a tax change, only to receive a lower price because due diligence revealed avoidable problems, would almost certainly cost more than the tax saving. The right approach is to assess honestly whether your business is ready, and if it is, to move promptly.

A Practical Perspective

The BADR change is a genuine factor for owners who are already close to a decision. It is not, on its own, a reason to sell a business you are not ready to sell. But if you have been considering a sale in the next year or two, the timing question is worth examining carefully alongside the current strength of the electrical acquisition market.

For owners who want to understand both the tax implications and the current market conditions, the best starting point is a free first conversation that covers both. We can advise on market and valuation; your accountant can advise on the tax position. Between those two inputs, you will have a clear picture of what a sale in the near term would mean for you.

Tax treatment depends on your own circumstances, so take advice from your own accountant or tax adviser; we set out which professionals you will need, and when.