Owners rush to close their companies before each rise in the tax on selling

If you've ever thought about closing your company rather than selling it, you're far from alone. Every month, several hundred owners in the UK close a solvent company through a members' voluntary liquidation: they pay the bills, take out what's left, and the money is normally taxed as a capital gain. The timing is theirs to choose, which makes it a clear measure of how owners respond when the tax on selling changes.

We counted every members' voluntary liquidation notice in The Gazette from January 2019 to September 2026, 78,652 companies in all, and set them against the changes to Capital Gains Tax and the relief owners claim when they sell or close, Entrepreneurs' Relief until April 2020 and Business Asset Disposal Relief since.

Each change, and the rush around it

A normal month since 2019 brings about 730 solvent liquidations. Ahead of each change, the number jumped. After the Budgets it was back to normal within a couple of months, and after each April rise in the relief it fell to less than half of normal by May, as if owners who would have closed later had brought it forward. April stays high because resolutions passed in late March are often published in early April.

The March spikes aren't just owners tidying up before the end of the tax year. In March 2019, with no change to the rate or lifetime limit due, there were 852. In March 2024, when the only change due was the annual tax-free allowance falling from £6,000 to £3,000, there were 850. In March 2025 there were 1,691, nearly twice as many, and in March 2026 1,511. The October 2024 spike came in the weeks before a Budget at which a rise in Capital Gains Tax was widely reported to be coming, and it came, from the day it was announced. That Budget didn't change the relief's rate on the day, but owners closing ahead of it couldn't know that.

March 2020 and March 2021 show owners acting on what they expected. The March 2020 Budget, on 11 March, cut the relief's lifetime limit from £10,000,000 to £1,000,000 from that day, after weeks of reports that it would. 2,177 of that month's 2,599 were published before the first lockdown began on 23 March. A year later, after an official review had raised aligning Capital Gains Tax with income tax, 1,716 solvent liquidations were published in February 2021 and 2,496 in March, around a Budget that in the end left the tax as it was.

Quieter since the relief started rising

Outside the spikes, owners are closing fewer solvent companies than they did. From June to September, away from the spring rush, solvent liquidations averaged 792 a month from 2019 to 2024, and 412 in 2025 and 2026. May 2026 and May 2025 were the two quietest months since at least January 2019.

Insolvent liquidations didn't move

Creditors' voluntary liquidations, where a company can't pay its debts, leave nothing for the owners, so the tax on selling doesn't come into them. From October 2023, when our count of them starts, they averaged about 1,660 a month, with 1,655 in October 2024, 1,743 in March 2025 and 1,794 in March 2026. The spikes are in the solvent closures alone.

HMRC's figures show the same rush

Claims had been drifting down, from 48,000 in 2021 to 2022 to 42,000 in 2023 to 2024. Then, in the last tax year before the rate went up, they jumped to 61,000, and the gains claimed on went from £11.0bn to £18.4bn. Those figures include company sales as well as closures.

What it means if you're thinking of selling

A change to the tax on selling can bring decisions forward by months or years, for closures most of all, because an owner can start one in days. A sale is slower. It takes months to find a buyer and agree terms, so an owner who starts when a change is announced often can't finish before it lands.

If you're weighing up when to step back, it's worth knowing what each route would leave you with before the next change, not after it. Our business sale tax calculator works through your own figures, how the tax on selling a business has changed since 2008 shows how far the rates have moved, and our study of solvent Kent companies closed by their own directors looks at who closes rather than sells. All of it is general guidance, not tax advice.

The next change is already set. The Budget on 28 October 2026 cut the relief's lifetime limit from £1,000,000 to £500,000 for disposals from 6 April 2027. Our piece on the new £500,000 limit sets out who it reaches and what it costs.

How we worked out the figures

A members' voluntary liquidation starts with the shareholders resolving to wind the company up, and the resolution must be published in The Gazette, whose London, Edinburgh and Belfast editions cover the UK. We took every notice of that kind (notice type 2431) from January 2019 to September 2026, counted each company once, matched on its company number or name, and placed it in the month its first notice was published, usually within a couple of weeks of the resolution. Insolvent liquidations are the same count for creditors' voluntary liquidations (notice type 2441), from October 2023. A normal month is the median month over the whole period, which the few spike months barely move. Because notices are dated when they're published, a spike can run a week or two past the date of the change it came before.

HMRC's figures come from tax returns. They count people claiming Business Asset Disposal Relief or Investors' Relief in each tax year, which takes in business sales as well as liquidations, and the latest year is provisional.