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# Budget 2026 halves the tax-relief limit for selling a clinic
- URL: https://www.morningsurgery.com/budget-2026-clinic-owners/
- Published: 2026-10-28T14:39:18.000Z
- Updated: 2026-10-29T12:34:54.000Z
- Description: Owners who sell after 5 April 2027 could pay up to £30,000 more each. Plus: a 3.9% minimum wage rise, and why most clinics miss out on the business rates cut.
- Author: Dr Hassan Maimouni
- Tags: Tax

Chancellor John Healey's first Budget, delivered on Wednesday 28 October, cut the lifetime limit for Business Asset Disposal Relief (BADR) from £1 million to £500,000\. The new limit applies to sales made on or after 6 April 2027\. The relief rate stays at 18%.

Clinic owners will also face a 3.9% rise in the minimum wage next spring. A business rates cut announced in the same speech will not apply to most clinics.

## Background

BADR, formerly entrepreneurs' relief, reduces capital gains tax when you sell all or part of a business, or shares in your own trading company. Gains within the lifetime limit are taxed at 18%, rather than the 24% that higher-rate taxpayers pay. To qualify on shares, you usually need to hold at least 5% of the company and work in it as an employee or officer for two years before the sale.

The Chancellor said the cut means "no change for three in four claimants". Practice sales are often larger than £500,000, so many clinic owners will be in the remaining quarter.

## The other measures

- **Minimum wage:** From April 2027, the National Living Wage rises from £12.71 to £13.21 an hour for workers aged 21 and over. The rate for 18 to 20-year-olds rises to £11.27, and the rate for 16 and 17-year-olds and apprentices rises to £8.31.
- **Business rates:** In England, the small business rate relief threshold for retail, hospitality and leisure premises rises from £12,000 to £18,000 in rateable value from April 2027\. Council guidance lists GPs, doctors and dentists as ineligible for this category, while hair and beauty premises qualify.
- **Founders' Relief:** A new 10% capital gains tax rate on up to £10 million of lifetime gains, from 6 April 2027, for founders and early investors in companies with "sustained high growth". The Treasury is consulting on the conditions until 30 November. Any BADR you have already claimed will count against the £10 million.
- **Property income:** Income tax on property income rises by two percentage points from April 2027\. This matters if you own your premises personally and rent them to your clinic company.
- **Mileage:** The 55p tax-free rate for the first 10,000 business miles becomes permanent, and the rate above 10,000 miles rises from 25p to 35p.

The speech did not announce changes to employer National Insurance or dividend tax.

## Analysis: what it means for your clinic

The BADR change has a ceiling. The most it can cost one seller is £30,000, which is the 6-point gap between 18% and 24% on the £500,000 that loses relief. A seller with a £750,000 gain pays £15,000 more, and anyone with a gain of £1 million or more pays £30,000 more.

That is not a reason to sell early. But if a sale is already under way, completing it before 6 April 2027 is worth up to £30,000 for each shareholder, so check the timetable with your adviser now. If your spouse or business partner owns shares and works in the business, they have their own limit.

Founders' Relief is aimed at fast-growing companies. A single-site clinic is unlikely to count, but owners building a multi-site group should watch how "high growth" is defined.

The wage rise is the cost most clinics will feel first. Each full-time employee on the National Living Wage will cost about £1,100 more a year, including employer National Insurance. The pressure will not stop at the minimum. Trainee dental nurses, receptionists and treatment coordinators paid just above it will expect their pay gap to be kept.

On business rates, a medical clinic gets no new relief. An aesthetics business that operates mainly as a beauty salon may qualify, so ask your council.

## What to watch next

- The Finance Bill, which will set out how sales agreed before 6 April 2027 but completed after it are treated.
- The Founders' Relief consultation, which closes on 30 November.
- Your council's eligibility rules for the April 2027 rates relief.

*This article is general information, not tax advice. Speak to your accountant before making decisions.*

## Sources

- [GOV.UK: Supporting documents for Budget 2026](https://www.gov.uk/government/publications/supporting-documents-for-budget-2026?ref=morningsurgery.com)
- [GOV.UK: LPC recommendations take the National Living Wage to £13.21](https://www.gov.uk/government/news/lpc-recommendations-take-the-national-living-wage-to-1321?ref=morningsurgery.com)
- [ByteStart: Budget 2026 halves Business Asset Disposal Relief limit to £500,000](https://www.bytestart.co.uk/news-insights/budget-2026-business-asset-disposal-relief-500000/?ref=morningsurgery.com)
- [Investment Week: Government sets out lifetime founder's relief on CGT up to £10m](https://www.investmentweek.co.uk/news/4537997/budget-26-government-sets-lifetime-founders-relief-cgt-10m?ref=morningsurgery.com)
- [Financial Planning Today: Chancellor to launch new Founders' CGT Relief](https://www.financialplanningtoday.co.uk/news/budget26-chancellor-to-launch-new-founders%E2%80%99-cgt-relief?ref=morningsurgery.com)
- [SME Web: Budget 2026, the small business measures entrepreneurs need to know](https://www.smeweb.com/budget-2026-the-small-business-measures-entrepreneurs-need-to-know/?ref=morningsurgery.com)
- [Manchester City Council: Retail, hospitality and leisure multipliers 2026/27](https://www.manchester.gov.uk/business-and-investment/business-rates/money-off-your-business-rates/retail,-hospitality-and-leisure-rhl-multipliers-202627?ref=morningsurgery.com)
- [Ross Martin: Approved increase to employee mileage rates](https://rossmartin.co.uk/sme-tax-news/8947-approved-increase-to-employee-mileage-rates-marks-first-change-in-15-years?ref=morningsurgery.com)