Most owners pay Capital Gains Tax when they sell a cleaning business, and if you qualify for Business Asset Disposal Relief the rate is 18% for sales from 6 April 2026 (14% from 6 April 2025 to 5 April 2026) on up to £1 million of qualifying gains over your lifetime.
Without the relief, gains are taxed at 18% within the basic rate band and 24% above it, so the structure of the sale and the conditions for the relief should be checked with an accountant before you agree terms.
GOV.UK's page on Capital Gains Tax for businesses says sole traders and partners pay Capital Gains Tax on the gain when they sell business assets such as the customer list, the business's reputation, vans and equipment, while limited companies pay Corporation Tax on profits from selling their assets, and an owner who sells their shares in a limited company pays Capital Gains Tax personally on the gain on those shares.
For gains made from 6 April 2026, the standard Capital Gains Tax rates are 18% on gains that fall within the basic rate band and 24% above it, after a tax-free allowance of £3,000 for the 2026 to 2027 tax year. The basic rate band for that year is £37,700, and how much of it is left for your gain depends on your income in the year you sell.
GOV.UK's guidance on the relief gives the rate by the date of the sale:
| Date of sale | Rate on qualifying gains |
|---|---|
| On or before 5 April 2025 | 10% |
| 6 April 2025 to 5 April 2026 | 14% |
| From 6 April 2026 | 18% |
The relief applies to a lifetime total of £1 million of qualifying gains, a limit that HMRC's Capital Gains Manual records was cut from £10 million for disposals on or after 11 March 2020, so any earlier claims you have made count against it. As a rough illustration only, an owner with a £400,000 gain on shares that qualifies in full, and no other gains, would pay 18% on £397,000 after the £3,000 allowance, which is £71,460, compared with £95,280 at the 24% higher rate without the relief.
GOV.UK sets out the conditions for the relief, which differ for sole traders and for company owners. If you are a sole trader or partner, you must have owned the business for at least two years up to the date you sell it, and if you close the business instead the same conditions apply and the business assets must be disposed of within three years.
If you are selling shares in a limited cleaning company, for at least two years up to the date of sale:
Shares from an Enterprise Management Incentive scheme have separate rules, and a cleaning company holding large cash balances or property on top of its trade can raise questions about whether it is mainly trading, which your accountant should look at well before a sale.
Where the future amounts are fixed at the date of the sale, HMRC's Capital Gains Manual says the full amount is included in the sale proceeds at the time of the sale and there are no further tax consequences when the payments arrive, so tax can fall due on money you have not yet received, and relief may be available if part of it is never paid.
An earn-out, where the later payment depends on how the business performs after the sale, raises separate questions, and your accountant should work through the timing and the cash needed to pay the tax before you agree how the price is split.
GOV.UK says you can claim through your Self Assessment tax return or by filling in Section A of the Business Asset Disposal Relief helpsheet, and the deadline depends on the tax year of the sale, so for a sale in the 2025 to 2026 tax year it is 31 January 2028.
We are not tax advisers, and every owner's position depends on how the business is held, their other income and gains, and earlier claims, so we always ask sellers to speak to an accountant before agreeing a structure with a buyer. If a sale is on your mind, we can talk you through the steps, and our guides to what your cleaning business is worth and TUPE on a sale cover the other questions worth answering early.
The rate is 18% for qualifying sales from 6 April 2026, up from 14% for sales between 6 April 2025 and 5 April 2026. It applies to up to £1 million of qualifying gains over your lifetime.
You need at least two years up to the date of sale. Sole traders and partners must have owned the business for that time, and company owners must have been an employee or officer, with the company trading and their personal company, for the same period.
A share sale is usually simpler for the seller because you pay Capital Gains Tax once on your gain, with the relief if you qualify. In an asset sale by a company, the company pays Corporation Tax and taking the money out is a second step with its own tax.
Usually yes, at the time of the sale, if the later payments are fixed amounts, because HMRC includes them in the sale proceeds when the sale happens. Earn-outs that depend on future results are treated separately, so ask your accountant before agreeing one.
You claim it through your Self Assessment tax return or Section A of the relief's helpsheet. For a sale in the 2025 to 2026 tax year the deadline is 31 January 2028, and GOV.UK lists the deadline for each year.
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