What is debt finance and what are the benefits?
18/04/2023. Debt can sound daunting for business owners but actually can be a cost-efficient way of obtaining the finance required in the short to medium term to realise growth and expansion plans.
Privately Owned Business newsletter - April 2022
What’s next to fund growth in your business?
The world is looking messy right now with plenty of reasons for businesses to be cautious at best and fearful at worst. We can all reel off much the same list of uncertainties including fears of stagflation; whether we will be able to avoid a recession; the rising costs of energy, materials and labour; whether businesses will be able to pass these on or will see margins squeezed instead; how high-interest rates will go; the difficulty in recruiting; the continuing impact of Brexit; and the challenges of energy transition and net-zero which have been accelerated by the war in Ukraine. Our article on the economic outlook aims to help you navigate some of this.
At the same time whenever there are a series of challenges and pressure points there are also opportunities to innovate, to adapt, and to back new ideas. For some, the right thing to do right now will be to generate and retain profit for future investment. For others, it will be to invest now to take their business in new directions. Either way, you may be thinking about how your business should be funded. Where rising interest rates make levels of debt funding uncomfortable it’s natural to wonder whether debt should be swapped for equity. There are a series of articles on this theme although, of course, no ‘one size fits all’ answer to the question. Instead, you’ll find some thought starters which you can pursue with a conversation with our corporate finance specialists if you think that might be helpful.
Figures just published on 22 April 2022 showed government tax receipts for the year to 31 March 2022 were £133.8bn higher than in the previous year at £718.2bn. Part of this is the ending of Covid tax deferrals and the post-Covid bounce, but it does emphasise that managing tax cashflows is an important part of business funding since government tax receipts are all generated one way or another from the private sector. Sometimes tax reliefs also directly underwrite investment through R&D tax credits or the capital investment super-deduction (both of which are under review). Several articles pick up on these themes.
We also comment on the business tax proposals of the Spring Statement which did get rather overlooked in the controversies surrounding the cost of living and the non-domicile rules. We would love to see a coherent tax system that encourages long-term productive investment, especially for the privately owned business sector. The Spring Statement suggested that we don’t really have one right now. We agree with that. There are likely to be a series of consultations during the summer on how the tax system can better support capital investment, innovation, and investment in skills. We will be making our own representations in support of business during these consultations and would be happy to discuss this with any organisations representing the privately owned business community.
Get in touch
If you have any questions regarding the above, please get in touch with us using the contact form below.
Private equity investment and the benefits
24/04/2023. Private equity investment focuses on securing capital that can be used to facilitate your growth plans or de-risk your investment by extracting capital from the business.
Financing growth through debt or private equity
29/04/2022. Debt finance and Private equity investment are two popular options when financing growth. Which option is the best for your business?
Enhancing employee reward to support future growth
28/04/2022. Getting reward right is complicated. All individuals, employees, HR, Finance, Tax and other professionals have their own views and what may work for some may not be viewed as attractive by others.
UK economic overview
28/04/2022. The UK economy is expected to move in line with the global economy, as systemic risks rise. Broadly speaking, we expect to see lower growth and higher inflation.
Business taxes in the Spring Statement
The part of the Spring Statement Tax Plan that perhaps did not get the discussion it deserved was related to boosting growth and productivity in the private sector.
Research and development & grant funding
28/04/2022. R&D is a corporation tax relief, designed to reduce your company’s tax liability if you pay corporation tax or, in certain circumstances, a tax credit (cash repayment) may be received.
The importance of maintaining statutory registers
27/11/2023. Every company is required by law to keep specified registers and records which set out information on the company in respect of its members, officers and charges (the “Statutory Registers”).
The importance of management information
28/04/2022. When you are selling your business, one important area which is often underestimated is undoubtedly the financial due diligence (FDD) exercise. FDD involves the prospective buyer analysing the financial data of the company for the last say 3-5 years.