The short answer. Get two to three years of clean accounts and monthly management figures, show the profit a buyer will accept, reduce the business’s dependence on you and on its biggest customers, and tidy the contracts. Then choose an adviser and a route: a trade buyer, your management team or an employee ownership trust. Take tax advice early, because Business Asset Disposal Relief changes on 6 April 2027.
Why the timing matters in 2026 and 2027
Sales of small UK companies are at their highest for years. Rathbones counted 5,774 business sales at Companies House in 2025, an eight-year high, as reported by Business Sale Report.
Tax is one reason. Business Asset Disposal Relief taxes qualifying gains on selling a trading business at 18%, up to a lifetime limit. That limit falls from £1 million to £500,000 for disposals on or after 6 April 2027 (GOV.UK, October 2026). On a £1 million qualifying gain, a higher-rate taxpayer would pay about £30,000 more, because the second £500,000 would be taxed at 24% instead of 18%.
Signing early is not a simple fix. Under the new rules, a contract signed before 6 April 2027 that completes afterwards can still be capped at £500,000 unless the parties show it was not made to get the tax advantage. That is a question for your tax adviser, and not a reason to rush a bad deal.
The steps, in order
1. Decide what you want from the sale
Price, timing, whether you stay on for a handover, who you would and would not sell to, and what happens to your staff. Start 12 to 24 months before you want to leave.
2. Get the numbers ready for a buyer
Filed accounts on time, monthly management accounts with a balance sheet, a reconciled bank, aged debtors and creditors, and personal costs taken out of the business or listed, with evidence, as adjustments.
3. Work out the profit a buyer will accept
Buyers price small companies on underlying EBITDA: profit before interest, tax, depreciation and amortisation, adjusted for one-off items and for your own pay at the rate it would cost to replace you. A buyer’s accountant will test every adjustment, so keep the evidence.
4. Reduce the risks that lower the price
- You. If the key relationships, the know-how and the bank mandate all sit with you, the business is worth less without you.
- Customer concentration. One customer with a large share of sales makes buyers nervous.
- Contracts. Short, verbal or out-of-date contracts and leases, and intellectual property the company does not own.
- Tax. Overdue VAT, PAYE or corporation tax, and open enquiries.
5. Know your net debt and working capital
Most deals are priced “cash-free, debt-free” with a normal level of working capital. Loans, leases, HMRC arrears, director’s loans and some deferred income come off the price. Work out your normal working capital before the buyer sets it for you.
6. Get an indicative idea of value
Small company deals are usually priced as a multiple of underlying EBITDA, with lower multiples for smaller and owner-dependent businesses (Dealsuite UK and Ireland M&A Monitor). Dealsuite has also found that sellers’ expectations were too high in nearly half of UK and Ireland deal processes. A range from published multiples is a sense check. Your broker or corporate finance adviser sets the asking price.
7. Choose the route and an adviser
A trade sale, a management buy-out, an employee ownership trust or a sale through a business broker. Ask every adviser what they charge up front, what they charge on success, and what you pay if the business does not sell.
8. Prepare the data room
Accounts, management accounts, tax returns, customer and supplier contracts, leases, staff contracts, insurance, licences and anything that could become a dispute. A complete data room shortens due diligence and keeps the price where it was agreed.
9. Heads of terms, due diligence, contract and completion
Heads of terms set the price, the structure (cash at completion, deferred payments or an earn-out) and a period of exclusivity. The buyer’s financial, legal and tax due diligence follows, then the sale agreement with its warranties and your disclosure letter, then completion.
How long it takes
Allow a year or two to prepare, then typically six to twelve months from the first approach to completion. Businesses with clean records that run without the owner sell fastest.
Where a sale readiness review fits
The sale readiness review covers steps 2 to 6. It reads the business the way a buyer will, test by test, and sets out the profit a buyer is likely to accept, what will come off the price, the normal working capital and an indicative value range (not a formal valuation), with a 6 to 12 month plan and a data room checklist. From £2,699.
Questions
How long does it take to sell a small business in the UK?
Typically six to twelve months from the first approach to completion, after a year or two of preparation. Clean records and a business that runs without the owner make it faster.
Do I pay tax when I sell my company?
Usually capital gains tax on the sale of your shares. Business Asset Disposal Relief can reduce the rate on qualifying gains to 18%, up to a lifetime limit that falls from £1 million to £500,000 from 6 April 2027. The conditions are strict, so take advice from a tax adviser before you agree terms. I do not give tax advice.
What is my business worth?
Buyers usually start from a multiple of underlying EBITDA, then deduct net debt and adjust for working capital. The multiple depends on size, growth, risk and how much the business depends on you. A sale readiness review gives an indicative range, not a formal valuation.
Should I sell shares or assets?
Most owners of a limited company prefer to sell shares. Many buyers prefer to buy assets, to leave old liabilities behind. Your solicitor and tax adviser will explain the trade-off in your case.
See your business the way a buyer will
The sale readiness review sets out what a buyer will test, what will come off the price, and a 6 to 12 month plan. First draft in 5 working days.
The sale readiness reviewGet a fixed quoteHow the price is worked out, step by step: how to value my business in the UK.