Deal Dispatch – Issue 36

Welcome to our Corporate Finance division’s regular deal round-up.

Market overview

Welcome to Deal Dispatch, the first edition under our new PKF Smith Cooper branding – more of which later – that showcases some of our recent transactions. Since our mid-Summer edition, the pandemic has continued to create difficult environments for many, so we count ourselves very fortunate to have had the benefit of a buoyant M&A market; whilst some sectors have obviously been detrimentally affected, others have prospered because of, or despite, the pandemic.

Businesses and the market have continued to benefit from government support, access to low-interest debt and plentiful “dry powder” in Private Equity coffers, a sharp economic recovery, and strong demand for internationally “cheap” UK assets – especially from the US and Europe.

However, the future heralds the winding down of government support, potential changes to Capital
Gains Tax (CGT), and the possibility of inflation and tightening of the supply chain – all macro issues that may impact on the M&A market, whether positively or negatively. We look at recent opinion on CGT and inflation later in this edition.

Our overall conclusions are that the future is especially hard to predict at present, and so there are certainly good reasons, for both buyers and sellers, to seize the conducive M&A conditions we are seeing now.

John Farnsworth, Head of Corporate Finance

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Deal Dispatch – Issue 35

Welcome to our regular deal round-up.

Market overview

Despite lockdown 3 restrictions imposed from January – now thankfully being relaxed – I’m pleased to report that the improved deal flow reported last time has continued unabated, as you’ll see from the latest batch of deal completions in this issue. M&A activity has undoubtedly been helped by government support measures which have underpinned the economy and shored-up confidence, and by the continued low interest rates.

What happens now, remains to be seen but, despite the omission of changes in CGT from the Spring Budget we think it’s likely to play a part. Weight of opinion suggests the changes were merely deferred and that they may be implemented later this year, or in next year’s budget. Accordingly, there are strong arguments for both buyers and sellers to consider transactions in the near term. Either way, we expect a busy market as normality returns.

– Darren Hodson, Corporate Finance Partner

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Corporate finance annual deals summary 2020-2021

Welcome to our round-up of deals in the year to 31 March 2021.

Against the backdrop of the pandemic we had a very good year to March 21, completing 27 deals worth £152m – not far off our exceptional 2020 numbers. In amongst the national players, we are proud to have maintained our top-10 ranking for deal volumes in Experian’s Midlands Financial Adviser league table, and to have multiple award nominations in the forthcoming Insider Deal Awards. These consistent top-10 rankings and awards have helped build our hard-won reputation as one of the “go-to” advisers both regionally, and UK-wide in our specialist sectors.

We have been privileged to represent some terrific clients in truly fascinating deals that have achieved exceptional results, and salute all those that have worked so hard in this difficult year.

We are very optimistic of the future, irrespective of the possible “pushing” of the market by the expected changes to Capital Gains Tax, rumoured for November 2021 or next March.

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Charity News – Spring 2021

At Smith Cooper, we are experts with regard to the charities and not-for-profit sector.

Our Charity News includes the latest guidance on the continuing impact of the COVID-19 pandemic and the support available to the not-for-profit sector, including a summary of main announcements made in the recent Budget speech.

We also consider the impact of recent reporting and tax developments and other pertinent issues giving you the inside track on the sector’s current hot topics and latest guidance. The newsletter is applicable to the whole of the United Kingdom and makes reference to the three UK charity regulators:

  • The Charity Commission for Northern Ireland (CCNI)
  •  The Office of the Scottish Charity Regulator (OSCR) and
  • The Charity Commission for England and Wales (CCEW)

At Smith Cooper, our services are more than just a box ticking exercise. We take the time to get to know and understand your charity to ensure all of our services are tailored to your exact needs and objectives. Get in touch to find out more from our experts.

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Deal Dispatch – Issue 34

Welcome to our regular deal round-up.

Market overview

We have seen a marked increase in deal activity in the last 6 months, not just in our own deals but across the board. This has been driven by a couple of factors. Firstly, there was a strong suspicion that the Chancellor would make changes to CGT in the Spring budget, which caused many business owners to consider exit options in the run up. In the end the CGT changes never materialised, but it did create a hard deadline which drove deal activity. Secondly, after reduced activity up to the middle of 2020 we saw deals which had paused in March 2020 restart, and the appearance of a very strong stream of new opportunities – a trend that shows no signs of abating.

These new opportunities, our expectation that the Chancellor has merely deferred CGT changes – perhaps to later in 2021, and the effectiveness of the UK vaccine rollout speeding the UK to some semblance of normality, all promise to deliver a very busy 2021 for transactions. We believe there are strong arguments for both buyers and sellers to consider transactions in the near term.

Dan Bowtell, Corporate Finance Partner

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Year-End Tax Planning

Take advantage of any remaining reliefs, allowances and exemptions.

With the self-assessment tax year end approaching in April 2021, there are several tax planning opportunities you may wish to consider in order to take advantage of any remaining reliefs, allowances and exemptions, and ensure your finances remain tax-efficient.

Should you wish to discuss any of the items detailed below further, please do not hesitate to contact
a member of our dedicated tax team.

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Spring Budget 2021

On Wednesday 3rd March 2021, Chancellor Rishi Sunak presented the 2021 Budget against a backdrop of ongoing economic hardship, unveiling his economic plan to help the UK recover from the COVID-19 pandemic.

In his speech, The Chancellor stated his budget ‘meets the moment with a three-part plan to protect the jobs and livelihoods of the British people’.

Main Budget proposals

Tax measures

  • A super-deduction for companies investing in new plant and machinery
  • A time extension of the temporary increase to the SDLT nil rate band for residential property in England and Northern Ireland
  • An extension to the temporary 5% reduced rate of VAT for the hospitality and leisure sector
  • A temporary increase in the carry-back period for business losses
  • An increased rate of corporation tax from 2023.

Other measures

  • A new mortgage guarantee scheme
  • Extension to the Job Retention Scheme
  • A Self-Employment Income Support Scheme fourth and fifth grant
  • An extension to the business rates holiday in England.

Previously announced measures:

  • A cap on the amount of R&D tax credit paid to a loss-making small or medium-sized enterprise
  • New rules apply to off-payroll working payments made for services provided on or after 6 April 2021.

Our Budget Summary provides an overview of the key announcements made in the Chancellor’s speech. It also looks beyond the headlines and provides more comprehensive details on the lesser-known changes that may impact your business and/or your personal finances.

Throughout the Summary, we have included informative comments to help you assess the effect that the proposed changes may have on you personally.

If you have any questions regarding any of the topics mentioned in the Chancellor’s announcement, or would like further clarity regarding how the changes might affect you, please do not hesitate to get in touch with a member of our dedicated team.

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Deal Making – Sector Forecast Report

Deal making during 2020 was generally a year of two halves.

Following a strong level of M&A activity up to lockdown there was 6- 8 weeks of paralysis in April and May – largely as a result of COVID-19 concerns (as everyone acclimatised to the pandemic and its effect on funding and asset prices), but also fuelled by Brexit uncertainty, and potential further changes to Entrepreneurs’ Relief (aka BADR) and tax generally. Despite all of this, M&A activity began to recover (variably dependant on sector) in late May, a trend which has continued and since strengthened, gaining notable traction in September/ October – driven by sellers spooked by the unpredictability of the pandemic and fears of adverse capital tax changes, and steady demand from buyers, especially those with funding.

Whilst we have seen fewer large transactions complete this year, there has been a surge in small medium sized deals – those that benefit owner managers – and the small-mid market has recovered much quicker.

As ever, there have been good and bad sectors – but again many sectors detrimentally affected by COVID have restarted with spirit, fuelled by prospects of early budget which has led to increase in deal activity.

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Charity News – Autumn 2020

Our charity news includes the latest guidance on coping with the impact of covid-19, promoting diversity and inclusion within the charity sector and how to report serious incidents to the charity regulators.

We also consider the impact of recent reporting and tax developments and other pertinent issues, giving you the inside track on the sector’s current hot topics and latest guidance.

The newsletter is applicable to the whole of the United Kingdom and makes reference to the
three UK charity regulators:

  • The Charity Commission for Northern Ireland (CCNI)
  • The Office of the Scottish Charity Regulator (OSCR) and
  • The Charity Commission for England and Wales (CCEW)

Here at Smith Cooper, our multifaceted team focus on developing strong and trusting relationships with our clients, becoming a trusted adviser. We pride ourselves on the comprehensive range of services we’re able to offer to charities.

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