Starting and selling a business
Complex economic outlook
Anyone contemplating starting a new business, especially a bricks and mortar one, needs to factor in current economic conditions. The UK economy is finally showing signs of growth, with a 2% uplift forecast for 2025. Inflation is down to 1.7% (September 2024); a quarter of what it was a year ago. Against this backdrop must be set the impact of the October 2024 Budget which – from April 2025 – will see substantial increases for employee costs and business rates. Smaller businesses in particular are facing weak sales growth due to the impact of high living costs on consumer spending, and many businesses are struggling to recruit sufficient staff because of the general skills shortages across the UK.
High energy costs have been a huge problem for many businesses for some time. Although prices for 2025 are expected to stabilise, they will remain relatively high. This is far from ideal for a new business whose cash flow could be tight.
When it comes to selling a business, it doesn’t matter whether you are developing a business idea to quickly cash in before starting all over again (the typical serial entrepreneur), planning a smart career move (with the successful sale of a self-started business looking very good on your resum.) or are in for the long haul – planning your exit strategy at an early stage will ensure you don’t pay more tax than necessary. This might be just the time to do that planning, especially as the rate of CGT payable where business asset disposal relief is available is going to nearly double over the next two tax years.
