Selling a business in the UK: What you need to prepare (2026 guide)
Published 30 July 2025. Updated 21 January 2026.
Selling a business is a major decision, and often a life-changing event. Whether you are planning for retirement, pursuing a new venture, or simply ready for a change, preparing your business for sale in the UK requires careful planning and the right professional advice.
Having supported business owners through this journey, I have seen how preparation reduces stress, builds confidence, and helps secure the best outcome, both financially and emotionally.
Here is a step-by-step breakdown of what you need to do when selling your business.
1. Know why you are selling your business
Understanding your motivation is the first step in the business sale process. Common reasons include:
Retirement
New business opportunities
Personal circumstances
Burnout or lifestyle changes
Being clear on your "why" shapes your timeline, strategy, and how you communicate with potential buyers.
2. Build a trusted team for your business sale
Selling a business involves complex legal, tax, and financial considerations. Do not go it alone.
Your core team should include:
Financial adviser - Considers your life during and after the sale, including effective tax planning and investment strategies
Accountant - Ensures your accounts are accurate and attractive to buyers
Solicitor - Manages legal contracts, liabilities, and transfer of ownership
Tax adviser - Helps you structure the sale tax-efficiently
Business broker - Markets your business and negotiates with buyers
These professionals guide you through the process and help protect your interests.
3. Get your business financials in order
One of the first things buyers will request is access to your financial documentation.
Ensure you have:
Clean, up-to-date accounts (preferably 3+ years)
Balance sheets and cash flow statements
Payroll, VAT, and HMRC filings
Forecasts and projections
Details of debts, liabilities, and assets
Transparency builds trust and speeds up due diligence.
4. Understand what your business is worth
A professional business valuation gives you a realistic idea of your market value and provides a foundation for negotiations.
Factors influencing valuation:
Profitability
Assets (physical, intellectual, brand value)
Market conditions and industry trends
Client/customer contracts and retention
Growth potential
Consider getting valuations from a broker and your accountant for comparison.
5. Review legal and operational details
Buyers will look closely at your operational readiness. Make sure:
Contracts - leases, suppliers, customers - are up to date
Licensing & compliance is in order
Business assets - equipment, IP, trademarks - are documented
HR policies and employee files are well maintained
Cleaning up your legal and operational framework prevents hold-ups later on.
6. Support your employees through the sale
If you have employees, you will need to comply with TUPE regulations (Transfer of Undertakings):
Inform and consult with staff early
Ensure continuity of terms and conditions
Handle redundancies (if any) legally
Your staff are key to a successful transition - keeping them informed and supported protects morale and business continuity.
7. Plan for tax when selling a business in the UK
Tax planning can make a huge difference to your final payout. A few things to consider:
Capital gains tax (CGT) - You may owe CGT on profits from the sale
Business asset disposal relief (BADR) - Formerly Entrepreneurs’ Relief, this reduces CGT if you qualify
BADR increased from 10% to 14% in April 2025. It is set to rise again to 18% in April 2026.
Planning ahead with a tax adviser could save you a lot of money.
8. Market the business professionally
To attract serious buyers:
Prepare a business prospectus or sale pack
Highlight your strengths, profitability, and growth opportunities
Consider a business broker or reputable online listing platforms
Buyers expect clarity and honest. Be ready to answer questions with detail and confidence.
9. Understand the sale process step by step
A typical business sale in the UK includes:
Initial valuation and preparation
Confidential marketing and buyer interest
Due diligence and negotiations
Heads of terms agreement
Legal drafting (SPA, warranties, etc.)
Completion and transfer of ownership
Stay involved and supported at each stage to avoid costly mistakes or delays.
10. Plan for life after selling your business
Many owners assume the sale will fund their retirement, but without proper planning, this can be risky.
Key considerations:
Do you have a pension or other income sources?
Will you invest the proceeds, start another venture, or retire?
Are your finances diversified beyond your business?
A financial adviser can help you make a plan for what comes next - whether it is relaxing, reinvesting, or reinventing.
Final thoughts: Your business sale is the start of something new
Selling a business is a big move - but with the right planning, it can also be one of the most rewarding. With a clear strategy, proper support, and a focus on what comes next, you will be better positioned to achieve your goals.
☕ Ready to create your personalised financial plan? Book a no obligation Clarity Call
Make your business exit smooth, profitable, and stress-free.
Your wealth wingwoman,
Shalini
P.S. It is never too soon, or too late, to start planning for your future self.
The value of an investment with St. James's Place will be directly linked to the performance of the funds you select and the value can therefore go down as well as up. You may get back less than you invested.
The levels and bases of taxation, and reliefs from taxation, can change at any time. The value of any tax relief depends on individual circumstances.
Please note that advice with regard to exit strategy planning may involve the referral to a service that is separate and distinct to those offered by St. James's Place.
FAQs: Selling a business in the UK
How early should I start preparing to sell my business in the UK?
Ideally, you should start preparing 12–24 months before selling your business in the UK. This allows time to:
Improve profitability and cash flow
Clean up financial records
Resolve legal or operational risks
Plan tax efficiency
Early preparation can significantly increase valuation and reduce stress during due diligence.
What is the first step when selling a business in the UK?
The first step is understanding why you are selling your business. Your reason for selling influences:
Timing of the sale
Type of buyer you attract
Negotiation strategy
Clear motivation helps align professional advice with your personal and financial goals.
What professionals do I need when selling a business?
Selling a business in the UK typically requires a team that includes:
Financial adviser (exit and post-sale planning)
Accountant (financial preparation and valuation support)
Solicitor (legal documentation and risk management)
Tax adviser (capital gains tax planning)
Business broker (buyer sourcing and negotiation)
This team protects your interests and maximises sale value.
What financial documents do buyers ask for when buying a business?
Buyers usually request:
3+ years of financial statements
Cash flow forecasts
VAT and tax filings with HMRC
Payroll and pension records
Details of assets, liabilities, and debts
Having documents ready speeds up due diligence and builds buyer confidence.
How is a business valued in the UK?
A business valuation is based on:
Historical profitability
Tangible and intangible assets
Industry trends and market conditions
Customer contracts and retention
Growth potential
Professional valuations are typically conducted by accountants or business brokers.
How can I increase the value of my business before selling?
To increase business value before sale:
Improve recurring revenue and margins
Reduce reliance on the owner
Secure long-term customer contracts
Document systems and processes
Resolve legal or compliance issues
Buyers pay more for stable, scalable, and well-documented businesses.
Do I have to pay tax when selling a business in the UK?
Yes, most sellers pay Capital Gains Tax (CGT) when selling a business. However:
Business Asset Disposal Relief (BADR) may reduce CGT
BADR is 14% in 2025 and rising to 18% in 2026
Advance tax planning can significantly reduce your tax bill
Always seek advice from a qualified tax specialist.
What is Business Asset Disposal Relief (BADR)?
Business Asset Disposal Relief allows eligible business owners to pay a reduced rate of CGT on qualifying gains when selling their business.
Eligibility depends on:
Ownership percentage
Length of ownership
Role within the business
Planning ahead is essential to ensure qualification.
How does TUPE affect selling a business with employees?
If your business has employees, TUPE regulations require that:
Employees transfer to the buyer on existing terms
Staff are informed and consulted appropriately
Employment rights are protected
Failure to comply can delay or derail a sale, so legal guidance is essential.
Should I tell my employees I am selling the business?
Employees should be informed at the appropriate stage, usually once a serious buyer is identified.
Early, honest communication:
Maintains morale
Reduces uncertainty
Supports a smooth transition
Your solicitor will advise on timing to remain compliant.
How long does it take to sell a business in the UK?
The business sale process typically takes 6 to 12 months, depending on:
Business size and complexity
Market conditions
Buyer funding and due diligence
Legal negotiations
Proper preparation can significantly shorten timelines.
What is included in the business sale process?
A typical UK business sale includes:
Preparation and valuation
Confidential marketing
Buyer negotiations
Due diligence
Heads of terms
Sale and purchase agreement
Completion and ownership transfer
Professional guidance at each stage reduces costly mistakes.
Should I use a business broker to sell my business?
A business broker can:
Market your business confidentially
Pre-qualify serious buyers
Negotiate better terms
Save time and reduce stress
They are especially valuable if you want maximum exposure and competitive offers.
What should I do with the money after selling my business?
After selling, consider:
Retirement and pension planning
Investment and diversification strategies
Starting another business
Estate and inheritance planning
A financial adviser can help turn sale proceeds into long-term financial security.
Is selling my business enough to fund retirement?
Not always. Many business owners assume the sale will fund retirement, but risks include:
Market volatility
Tax erosion
Longevity risk
Lack of diversification
A personalised financial plan ensures your wealth lasts as long as you do.
Can I still work in the business after selling it?
Yes, many deals include:
Consultancy agreements
Earn-outs
Transitional handover periods
These arrangements should be clearly documented during negotiations.
What mistakes should I avoid when selling a business?
Common mistakes include:
Poor financial records
Late tax planning
Going to market too early
Overvaluing the business
Failing to plan life after exit
Early professional advice helps avoid these pitfalls.
Is it ever too early to plan an exit strategy?
No. Exit planning is most effective when started years before selling. Even if a sale is not imminent, planning:
Increases flexibility
Improves business value
Reduces personal financial risk
Other blogs you may be interested in
Retirement planning for self-employed professionals: Build freedom on your terms
What do Financial Advisers do? How they secure your financial future in the UK
Why your relationship with money matters in financial planning
SJP approved 30/07/2025
