From April 2026, Business Asset Disposal Relief — the relief that lets the founders of British businesses pay a lower rate of capital gains tax when they sell up — has been raised from 14 percent to 18 percent. At the same time, Business Property Relief and Agricultural Property Relief have been capped at £2.5 million per person. Above that cap, only partial relief applies.

To the people who write Treasury press releases, this is "tax fairness". To the people who actually built British businesses over the last forty years, it is something rather different. It is a clear signal that Labour does not value the people who took the risk of starting, growing and inheriting British companies. This is not a policy. This is a political statement.

What BADR Actually Does — And Who Actually Uses It

Business Asset Disposal Relief, formerly called Entrepreneurs' Relief, exists for one reason. It rewards people who spent decades building British businesses by letting them keep more of the proceeds when they finally sell. It is not a loophole for hedge funds. It is not a tax shelter for billionaires. The lifetime limit was already capped at £1 million. The typical user of BADR is a sixty-year-old who built a regional engineering firm, employs forty people, has spent thirty years drawing modest dividends, and is now selling to fund retirement.

Labour's argument is that lifting BADR from 14 to 18 percent raises about £1.5 billion. That figure is contested by HMRC's own behavioural modelling. What is not contested is that the people most affected are the SME founders the British economy depends on. The same founders Labour will, at the next conference, claim it is "championing".

The £2.5 Million APR/BPR Cap Is Killing Family Farms

The cap on Business Property Relief and Agricultural Property Relief is, if anything, even more destructive. Until April, family farms and family businesses passed between generations free of inheritance tax. The economic logic was straightforward: a family farm worth £4 million on paper does not produce £4 million in cash when one generation dies. Forcing the new generation to find a six-figure inheritance tax bill, in cash, simply to keep operating the farm their grandparents built, is the surest way to break it up and sell it off.

That is now exactly what is happening. Family farms across rural England, Wales and Scotland are being sold to corporate landowners and overseas buyers because the new generation cannot find the cash to pay the IHT bill. This is not modernisation. This is the slow liquidation of the British countryside. The NFU has been clear about it. The Country Land and Business Association has been clear about it. The Treasury continues regardless.

The Bigger Picture: A Hostile Climate for British Business

BADR raises and APR caps do not exist in isolation. They sit alongside frozen tax thresholds dragging more workers into higher bands, the Employment Rights Act loading new compliance costs onto small employers, the National Insurance employer rate rise, and Making Tax Digital rolling out to the self-employed. Each measure on its own is defensible. Together, they amount to a structural war on the small and medium employer.

And the data shows it. UK GDP has flatlined for four consecutive quarters. Business investment is the weakest in the G7. The OECD has slashed UK growth forecasts to the worst in the G20. None of that is bad luck. It is the predictable result of policy choices.

What Reform UK Would Do

Reform UK would reverse the BADR rise back to 10 percent — its long-standing rate before recent changes — and restore full Business Property Relief and Agricultural Property Relief uncapped. We would raise the personal allowance to £20,000 to take low earners out of tax altogether, and cut the small profits rate of corporation tax to 15 percent. The British economy will not grow until the people building it stop being treated as a piggy bank.

British entrepreneurs are not a problem to be taxed. They are the engine of the British economy. Labour's April measures send precisely the opposite signal — to founders, to family farmers, and to every overseas investor watching to see how serious Britain is about being a place where it is worth doing business. It is now visibly not. Reform UK would change that, and change it fast.