As the UK braces for more tax hikes in the Autumn Statement, respected Gloucestershire firm WSP Solicitors has branded the chancellor's recent increases to Capital Gains Tax 'a failure'.
Chancellor Rachel Reeves increased the rate of Capital Gains Tax (CGT) from 10 per cent to 14 per cent back in April 2025 – a move WSP Solicitors says is 'depressing' the mergers and acquisitions market.
With businesses bearing the brunt of the Autumn Statement in 2024, including increases to National Insurance, coupled with CGT and the much-lambasted changes to Inheritance Tax, WSP Solicitors is seeing an increase in businesses either looking to sell now before CGT rates go up again, or wait until 2029 when they hope there will be a change in government, neither of which will benefit the Treasury in the way the chancellor had planned.
Peter Mardon is the head of company commercial and director at WSP Solicitors – and formerly the director of a successful international manufacturing company – and has over 35 years of experience in corporate and commercial law.
He said: 'In terms of raising revenue, the government’s Capital Gains Tax (CGT) rate increases have been a failure. In the first half of 2025, CGT receipts were £11.8 billion compared with £13.5 billion in the same period last year.'
And while Capital Gains Tax is rising again to 18 per cent in April 2026, Peter said that 'increasing CGT rates by a few percentage points' would be 'unlikely to make a significant difference in raising more money for the Treasury'.
'In fact, we have clients proposing to sell this tax year (2025-26) before the rise in rates to 18 per cent and other clients who propose to hold on until 2029 when they expect a change of government and a more CGT-friendly environment to be introduced,' he continued.
'This will have the effect of depressing the mergers and acquisitions market and collapsing CGT receipts just when the government is at its most desperate for tax revenue.'
While the rates sound low when compared with income tax rates, which are currently set at 20 per cent, 40 per cent and 45 per cent, there is no indexation for inflation with CGT, so if a business increases in value by less than the rate of inflation, it falls in value in real terms – but CGT is still payable on the gain, meaning those businesses are, in effect, being taxed on a loss.
After the chancellor promised to reduce government debt, weak economic growth so far this year means another wave of tax increases is expected in her Autumn Statement to help plug the gap, with businesses potentially still in the crosshairs.
The date for this year's Autumn Statement is yet to be announced, but it is expected to be in late October 2025.
