A number of business owners in Hampshire are now in a race against time to wind up their companies solvently and extract capital. 

The tax on Business Asset Disposal Relief (BADR) is set to rise from 10 per cent to 14 per cent on the first £1m of qualifying gains from April 6.

The change was announced in the Autumn Budget, with a deadline of April 5 for business owners to take action.

This has led to a surge of enquiries to Azets, an accountancy and advisory firm, from founders looking to minimise their tax bills.

Chris Tate, an Azets partner who advises business owners on solvent liquidations, said: "Any business owners who are contemplating winding down and extracting capital are urged to take immediate action.

"Leaving it much longer to kickstart such plans could risk missing out on what can be life-changing amounts of money."

He added: "Whilst the changes represent a further tax grab, the silver lining is that the lifetime allowance of £1m and existing qualification rules have not been tampered with, providing a further window of opportunity for business owners to maximise their tax savings.

"Many business owners have spent years building their businesses, working hard and taking risks, so they understandably want to keep as much of the fruits of their labour as possible."

For distributions above the first £1m BADR threshold, the capital gains tax rate of 24 per cent applies.

Mr Tate, who works out of Azets’ South Coast offices in Hampshire and Dorset, said: "What might not be appreciated by Westminster is that the 5 April deadline could have wider unintended consequences with a wave of well-run companies calling it a day on trading in order for owners, worried by the financial implications of the Autumn Budget, to accelerate retirement plans and exit earlier than planned.

"As of Friday, 15 November, there are only 100 working days left until 5 April, which is a Saturday – it is going to be tight for many unless they act now as there are many compliance hoops to jump through.

"They don’t want to be on the wrong side of that date."