Business Asset Disposal Relief rates to increase from April 2026. What this means for an MVL

Changes to Business Asset Disposal Relief (BADR) were announced in the 2024 Autumn Budget. The rate increased in April 2025 and will do so again in April 2026.

• BADR rate increase, 2025:
  10% to 14%
• BADR rate increase, from April 2026:
  14% to 18%

If you’re a company director considering a solvent Members Voluntary Liquidation (MVL), you may worry that these changes will negate BADR’s potential benefits.

Depending on your company’s circumstances, it may be beneficial to explore an MVL before the rates increase.

How will the BADR increase impact an MVL?

The upcoming increase means that you could pay more Capital Gains Tax (CGT) on the capital distribution to shareholders after the company’s liquidation.

If you’re considering placing your company into an MVL because of the April 2026 BADR rate increase, starting the process earlier can help ensure timings are properly considered. Speaking to us at an early stage can provide clarity on what’s involved and the process’ relevant timescales.

How much does an MVL cost?

The costs of an MVL can vary depending on your company’s circumstances, including the volume of its assets and its liabilities.

Our current prices for an MVL are as follows:

• £995 + VAT + expenses – Simple MVL with in specie distribution
  This option is for straightforward companies where there are no other matters to be dealt with as part of the liquidation. The company’s remaining value is held as cash at bank or a director’s loan account balance and can be distributed in specie. An in specie distribution can allow company funds to be distributed on day one of the liquidation, subject to the company meeting the required criteria.
• £1,995 + VAT + expenses – Simple MVL with physical cash distribution
  This option is for straightforward companies where there are no other matters to be dealt with as part of the liquidation. The liquidator will receive the company’s cash into the liquidation and physically distribute it to shareholders. The company funds will be distributed to shareholders in line with their shareholdings once the cash has been received into the liquidation.
• £2,500 + VAT + expenses – MVL with HMRC tax or VAT refund claims
  This option is for otherwise straightforward companies where corporation tax or VAT refunds need to be claimed from HMRC as part of the liquidation. This may be suitable whether the company’s existing funds are distributed in specie or by physical cash distribution.
  This may apply where the company has:
  • The company is due a corporation tax refund
  • The company is due a VAT refund
  • The refund needs to be received into the liquidation and distributed to shareholders

This tier is designed for MVLs where the main additional work is claiming corporation tax or VAT refunds from HMRC.

• Bespoke fee – Complex MVL
  Some MVLs need a bespoke quote because of the nature of the company and its position.
  This may apply where the company has:
  • Property, shares, investments or other assets
  • Assets that need to be sold or realised
  • Section 455 tax refunds
  • HMRC enquiries or investigations
  • Outstanding or disputed creditor claims
  • Active pension schemes
  • More complex shareholder or distribution requirements
  • Solvent restructuring requirements, including Section 110 reorganisations

A bespoke fee will be confirmed once we understand the company’s position and the work required.

Shareholder note: Where there are more than three shareholders to receive a distribution, an additional £100 + VAT per additional shareholder is added to the liquidators’ fee.

All tiers include the option for an in-specie distribution of company funds (a potential “day-1” distribution), subject to a final corporation tax return being provided.

How we can place your company into an MVL

If you want advice around entering an MVL, whether that’s because you’re looking to place your company into liquidation before the changes affect the amount of BADR you may receive, or are planning to liquidate your company in the future and want more information as to how these changes will affect you, speak to us.

1. Speak with our initial advisers
   Contact our team via phone, filling in a form, or via our online chat. If we can help, we will arrange a free consultation with one of our consultants to discuss your situation in more depth.
2. Initial assessment
   During the consultation, we will advise if an MVL is the most appropriate route forward for your company or whether alternative options are available.
3. Formally engage with Wilson Field
   If an MVL is appropriate for your company, we will confirm the necessary steps to place your company into liquidation and will issue you with the relevant documentation for you to formally engage us.

Summary

From April 2026, BADR rates will increase from 14% to 18%, potentially impacting the benefits of putting a solvent limited company into a tax-efficient MVL.

If you want to liquidate your solvent limited company before the rates increase, or you want more information before planning for a potential future liquidation, speak to us. We can discuss timescales and outline what information we’ll need to begin the process.