If you own a pest control business and have ever thought about selling, there is a tax change coming in April 2026 that is worth understanding. It will not affect every owner in the same way, but for those who are already considering a sale in the next year or two, the financial difference could be significant.
This article explains what is changing, what it means in real pound terms, and why timing might matter more than usual this year.
What Is BADR?
BADR stands for Business Asset Disposal Relief. You might know it by its previous name, Entrepreneur's Relief. It has been around in various forms since 2008, and the basic idea is straightforward: when you sell a qualifying business or business assets, you pay a reduced rate of Capital Gains Tax on the profit from the sale, up to a lifetime limit of £1 million in qualifying gains.
To qualify, you generally need to have owned the business for at least two years before the sale, and you need to have been actively involved in running it. For most pest control business owners who founded or have run their company for several years, meeting these conditions is usually not an issue.
The relief exists because successive governments have recognised that building and selling a business is different from, say, selling a second property or cashing in shares. The lower tax rate is designed to encourage entrepreneurship and make it less painful to realise the value you have built up over years of hard work.
What Is Changing
The current BADR rate is 14%. From April 2026, it rises to 18%. That is a four percentage point increase on qualifying gains up to the £1 million lifetime limit.
At 10%, the relief saved you 14 percentage points compared to the standard rate. At 18%, it will only save you 6 percentage points. The relief still exists, but it is worth considerably less than it used to be.
To put that in context: the standard Capital Gains Tax rate for higher-rate taxpayers is currently 24% on business assets. BADR gives you a meaningful discount on that, but the discount is getting smaller. At 10% (where it sat for many years before recent changes), the relief saved you 14 percentage points compared to the standard rate. At 18%, it will only save you 6 percentage points. The relief still exists, but it is worth considerably less than it used to be.
What This Means in Pounds
Let us work through a realistic example. Imagine you own a pest control business and you sell it for £400,000. After deducting your original costs and any allowable expenses, your qualifying gain is £400,000 (to keep the numbers simple).
Under the current 14% BADR rate: You would pay £56,000 in Capital Gains Tax on that gain.
Under the new 18% BADR rate (from April 2026): You would pay £72,000 in Capital Gains Tax on the same gain.
The difference: £16,000.
That is £16,000 more in tax on a £400,000 sale, simply because of when the completion date falls. For a larger sale at £600,000, the difference would be £24,000. For a business selling at £800,000, it is £32,000. And at the full £1 million lifetime limit, the difference is £40,000.
These are not trivial amounts. For many pest control business owners, £16,000 to £40,000 represents several months of personal income. It is money that could go towards your retirement, your next venture, or simply your financial security.
What This Means for Timing
The important thing to understand is that the rate that applies is determined by when the sale completes, not when you first start thinking about it or even when you agree heads of terms with a buyer. If your sale completes before April 2026, you pay 14%. If it completes after, you pay 18%.
A typical pest control business sale takes somewhere between three and six months from the point where you seriously engage with the process to the point where contracts are signed and money changes hands. That includes preparation, marketing to buyers, meetings, due diligence, and legal work. It is not something you can rush through in a few weeks, at least not if you want to achieve a good outcome.
For owners who have been thinking about selling within the next 12 to 18 months, the tax saving alone could justify moving faster. Completing before April rather than after could put an extra £16,000 to £40,000 in your pocket, depending on the sale price. That is not a reason to sell a business you are not ready to sell, but if you were already leaning that way, the arithmetic has shifted.
Even if completing before April 2026 is no longer realistic, there is another consideration. Tax rates have been moving in one direction for the past few years. BADR was 10% for a long time, then it went to 14%, and now it is going to 18%. There is no guarantee it will not rise again at the next Budget. Selling sooner rather than later locks in today's rate, whatever that rate happens to be.
A Word of Caution
This article is general information about a tax change that affects business owners across many sectors. It is not personal tax advice, and your own situation will have details and complications that a general overview cannot cover. Your accountant will be able to tell you exactly how BADR applies to your circumstances, whether you qualify, and what your likely tax position would be on a sale at different price points.
What we can say with confidence is that the change is real, the numbers are significant, and timing is a factor that is worth discussing with your advisers sooner rather than later.
Where to Go From Here
If you would like to understand what your business might be worth and whether the timing makes sense for your situation, we are happy to have a confidential conversation. There is no obligation, no pressure, and nothing moves forward without your say-so. Sometimes the most valuable thing is simply having a clear picture of your options, so you can make a decision on your own terms.
