Budget: CGT raid on employee ownership will undermine recovery in EOTs after formation slumped to lowest level in three years

Comments attributable to Jay Sanghrajka, Partner at Price Bailey, the chartered accountants:

The number of employee-owned businesses being created slumped to the lowest level in three years in Q2 2025 following the CGT clawback introduced in last year’s Budget. This further reduction in CGT relief could undermine the fragile recovery in employee ownership.

It fundamentally changes the risk calculus for sellers. While EOTs remain attractive for succession planning and employee engagement, the reduced tax incentive narrows the gap with other routes such as trade sales, private equity, or management buyouts.