UK entrepreneurs sell up for £108bn over last five years

● Study credits rise in start-ups for business sales adding £12bn in taxes

Entrepreneurs in the UK have made more than £100 billion from selling their businesses in the last five years and contributed £12bn in taxes, new research indicates.

British business owners raised a combined £108.4bn by selling their enterprises, either in full or as a partial asset, during the five years ending 31 March, according to figures released today by law firm Boodle Hatfield.

The sale of these ventures generated more than £12.2bn in capital gains tax for the UK government during the same period, at an annual average of £2.4bn.

According to the report, the “huge amount of value and tax” which has been generated by these transactions reflects the “increasing importance of the owner managed and private company segment” of the country’s economy.

The average amount of capital gains made from each busidrop ness sale by entrepreneurs has more than doubled, climbing to £628,200 in 2017/18, up from £360,800 in the financial year 2012/13.

The study credited growth in the UK’S start-up economy for a large proportion of this wealth creation, as the number of new businesses registered in the UK hit a record high of 660,000 last year.

London represented nearly one-third of this total, producing 216,000 new enterprises.

It also cited a surge in technology start-ups for driving this expansion.

It comes a week after Companies House data revealed that the number of new technology companies launched in the UK rose by 14 per cent in 2018, with 11,864 software development and programming businesses incorporated in the year.

However, the research, compiled by accountancy firm RSM, also revealed that Scotland was one of only two UK regions not to experience growth, with the number of newly formed tech firms falling to 444, a four per cent from the previous 12 months.

Rahul Thakrar, partner at Boodle Hatfield, said: “The huge sums made by entrepreneurs through business sales shows how the UK’S start-up economy is still firing on all cylinders.

“It’s so important entrepreneurialism is encouraged and there are fears that changes to tax relief on business sales could kill the golden goose.”

This comes as Entrepreneurial Scotland (ES) has announced a series of initiatives to boost the business leader community north of the Border.

The network and leadership development organisation last week revealed a tie-up with the University of Dundee to support students and academics in achieving their entrepreneurial goals.

Hailed as an “ambitious and innovative” alliance, the collaboration will see a full-time member of ES staff based at the university, which has produced numerous start-ups and spin-outs in recent years, to encourage students and staff to launch and develop their own ventures.