What Three Tax Deadlines Reveal About Planning a Solvent Company Exit

by John Bell, senior partner and licensed insolvency practitioner at Clarke Bell

In the five working days before the April 2026 increase in Business Asset Disposal Relief (BADR), shareholders passed 673 resolutions to wind up solvent UK companies. Over the following five working days, there were just 44.

It would be easy to assume tax drove these decisions, but the records cannot prove that. They do, however, raise an important question for accountants. Are business owners planning exits around their circumstances or tax deadlines?

At Clarke Bell, we analysed 21,839 Members’ Voluntary Liquidation (MVL) resolutions published between January 2024 and September 2026.

Similar spikes occurred before two earlier tax events. There were 1,092 resolutions before the October 2024 Autumn Budget, compared with 78 afterwards. Before BADR rose from 10% to 14% in April 2025, the figures were 604 and 39.

In all three cases, activity fell by more than 90% between the two five-day periods.

What Can We Conclude from the Figures?

An MVL is a procedure for winding up a company that can pay its debts. These are solvent closures, not evidence of business failures.

There is also a seasonal effect. Before the April 2024 tax-year end, when the BADR rate did not change, MVL activity reached 2.33 times the January daily average. Before the 2025 and 2026 BADR increases, the equivalent figures were 6.83 and 6.41 times.

That difference is striking, although the Gazette records do not establish either shareholders’ motives or whether they qualified for BADR.

The study tracks winding-up resolutions, not the dates of capital gains disposals. That distinction has practical consequences.

A Resolution Is Not a Taxable Distribution

When an owner asks whether they can liquidate before a tax rise, the first question should be what they mean by “before”.

Passing a winding-up resolution does not, by itself, mean that shareholders have received a capital distribution. For capital gains tax purposes, the relevant disposal generally occurs when the liquidator makes a distribution, which may be weeks or months later.

Outstanding tax liabilities, asset sales, and unresolved claims can all affect when a liquidator can distribute funds. Setting an ambitious date for the resolution cannot remove those obstacles.

This is why advisers should be cautious about promising that a company can secure a particular BADR rate simply by entering MVL before a deadline.

Start with the Owner’s Plans, Not the Tax Rate

An accountant’s first conversation should be about the owner’s intended outcome. Are they retiring? Moving into employment? Hoping to sell a viable business? Or mainly concerned by rumours of a tax increase?

An MVL might suit a genuinely solvent company whose owners have decided to cease trading. It is not necessarily preferable to a sale, succession plan or continued operation.

Eligibility also needs attention well before liquidation. For a typical qualifying share disposal, BADR depends on requirements concerning the company’s trading status, the shareholder’s role, and the minimum shareholding, voting, and economic rights over a qualifying two-year period. Previous claims also matter because of the £1 million lifetime limit.

The sums justify careful planning. A four-percentage-point increase in the applicable rate could add £20,000 ($26,705) to the tax on a fully qualifying £500,000 gain, assuming everything else is unchanged.

But a tax saving cannot compensate for choosing an unsuitable exit route.

Accountants should also check outstanding liabilities and directors’ loan accounts, consider the possible application of anti-avoidance rules if shareholders intend to carry on similar activities, and consult a licensed insolvency practitioner early enough to understand the likely timetable.

Ahead of the 28 October Budget

Another Autumn Budget is approaching, and owners may ask whether further changes are coming. No adviser can responsibly treat speculation as settled policy.

What accountants can do is test the current position, compare realistic exit routes and model the effect of possible changes without assuming they will happen.

If closure makes commercial sense, early preparation leaves time to address tax and practical issues. If it does not, a looming announcement is a poor reason to close a viable business.

For accountants, the question ahead of 28 October is not simply whether a client can close a company before the Budget. It is whether closing it is the right decision at all.

That conversation should start long before any deadline.

John Bell is Senior Partner and a Licensed Insolvency Practitioner at Clarke Bell, the firm he founded in 1994. A Fellow of the Institute of Chartered Accountants in England and Wales (ICAEW), he has more than 35 years of experience advising company directors on solvent and insolvent liquidations. He works closely with accountants and business owners on company closures, including Members’ Voluntary Liquidations (MVLs) and business exit planning.