UK to Scale Back Business Asset Disposal Relief in Budget Tax Overhaul

John Healey will significantly scale back Business Asset Disposal Relief (BADR), a £1bn tax break used mainly by retiring business owners, in next week's Budget, The Telegraph reported. Savings would be redirected to incentives for entrepreneurs who create jobs and economic value in Britain, potentially through lower capital gains tax rates or higher reliefs. About 40,000 former business owners benefited from BADR last year at a cost of £3.4bn to the Treasury, inflated by sales ahead of a rate rise from 10pc to 14pc in April 2025. HMRC estimates the relief cost £800m in the last tax year. The Resolution Foundation has called BADR "Britain's worst tax break," but the Federation of Small Businesses warned the relief, already reduced and limited, "must not be thoughtlessly discarded." Rathbones data showed just under 5,800 UK businesses were sold in 2025, an eight-year high and 70pc above 2018.