Hutchings Consultants have the added benefit of our in-house pharmacy accountancy and tax experts, Hutchings Accountants.
In the last budget, the Government changed the favourable relief scheme for sellers, Entrepreneurs Relief (ER) to Business Asset Disposal Relief (BADR), and at the same time reduced the lifetime limit from £10M to £1M, meaning the relief is now only available on the first million pounds of gains on the sale of your pharmacy.
Following the COVID-19 lockdown the Chancellor has admitted that the UK is grappling with something that is unprecedented. With the UK having to borrow hundreds of billions the Chancellor will need to find ways of raising revenue. It is possible that the government will introduce further changes to the relief, or they may abolish it completely. To put this in perspective, under current legislation if you made a gain of £1m on the sale of your pharmacy and you qualified for BADR you would only expect to pay tax of £100K (10%). However, if the relief is scrapped your tax bill could soar.
Some of the key aspects that will help and contribute towards a seller achieving a higher goodwill value when they come to sell are: