Nearly two fifths (38 per cent) of entrepreneurs in the UK are planning to explore the sale of their business earlier than expected due to the tax changes announced in the Autumn Budget, research by Brown Shipley has revealed.

The UK wealth manager and subsidiary of Quintet Private Bank conducted a survey of 4,000 adults, which highlighted the potential impact of the tax reforms combined with challenging market conditions.

Almost half (44 per cent) of the business owners surveyed believed than the increase in National Insurance will affect their plans for business growth.

More than a third (36 per cent) intended to sell their business in its entirety to crystalise value and manage wealth, up from 21 per cent in January 2024.

Financial risk was found to be prominent in entrepreneurs' minds, with the proportion of business owners planning to seek external investment in their companies over the next 12 to 36 months to diversify their financial risk rising from 25 per cent in January 2024 to 40 per cent.

Over a third (37 per cent) intended to seek external investment over the same period as part of their company’s strategic growth plans.

Despite the changes to inheritance tax for businesses, a third of entrepreneurs planned to reduce their equity in the business but keep it within the family as part of their generational wealth planning.

Entrepreneurs aged 18 to 34 were more likely to considering this than those aged 55 and older, at 49 per cent and 10 per cent respectively.

Meanwhile, 36 per cent of respondents were planning to reduce their ownership through internal succession to employees.

Business owners’ confidence in financial planning increased over the past year, with 54 per cent reporting confidence in the planning they had undertaken compared to 47 per cent in January 2024.

“The survey findings are reflective of conversations we are having with entrepreneurs,” said Brown Shipley head of private banking, south, Simon Smith.

"Confidence in the UK market is currently more challenging than it has been, and entrepreneurs are carefully assessing their options.

“In addition to business sentiment, entrepreneurs are considering what inheritance tax changes will mean for the legacy of their business.

“This reflects the fact that preserving wealth for future generations and succession planning are often key considerations for entrepreneurs when they are looking to sell or pass on their businesses.”

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