Despite a UK national budget looming up and with expectations of an ill thought through increase in capital gains tax, we have seen an increase in confidence levels since October 2009 by both entrepreneurs who judge the timing right to establish or expand their businesses and from investors interested in investing. However we are experiencing an extended completion process as we wait on the final outcome of the budget...
Are we alone in wondering why there hasn't been an outcry or press coverage regarding the proposed changes to capital gains tax? Headlines suggest that CGT will increase from 18% to 40% or even 50% which with reduction to annual exemption, no taper relief or indexation takes us back to a level at which investing (of taxed income) becomes very unattractive. Whilst we all await confirmation of the detail when the Budget is presented on 22 June - it has never stopped commentators or lobby interests speculating on the impact of such measures in the past.
Luke Johnson supports Small Business Britain through Beer & Partners
Strategic investment allows serial entrepreneur to tap into early stage companies
We are delighted to announce that Luke Johnson, columnist for the FT and former chairman of Channel 4, has become a strategic shareholder in Beer & Partners after acquiring a 27.5% stake in Beer & Partners, which makes him the largest single investor in the company.
Nearly every business plan we review (now over 3,000 per year) starts off with a plan to exit by floatation or trade sale within 3 years. We all know practically that this is likely to be 4-7 years and nearly always a trade sale. Therefore it is inevitable with early stage investments that news regarding successful exits take a long time to report back to you...
Despite a UK national budget looming up, recent scare stories of an increase in capital gains tax and an election on the horizon, (with little hope of an enlightened tax regime coming into play whichever party wins the election) we have seen an increase in confidence levels since October 2009 by both entrepreneurs who judge the timing right to establish or expand their businesses and from investors backing them.
Given that the 5th April is looming up and next year promises only tax increases, this week’s preamble focuses on the Enterprise Investment Scheme. EIS has brought substantial advantage to British businesses over many years and is only now beginning to be copied by other countries. In April 2009 EC approval for State Aid under EIS and VCT was given subject to a number of changes being made:
Whilst the economic outlook remains patchy and uncertain we have experienced a substantial increase in activity in business angel funding over the last 3 months with levels of funding returning to those of early 2008 and confidence returning to companies seeking funding to expand or develop their businesses.
There is no doubt that 2009 was a very difficult year for many business with a desperate shortage of available capital to enable them to ride the storm or capitalise on the opportunities to expand into areas left vacant by less able businesses.
Lord Sugar has received quite a lot of flack in the press after suggesting that small businesses should not expect a blank cheque simply for coming up with a good idea and that some firms would not succeed even in the best of times. I accept that calling them moaners who live in Disney World may not have the right ring from a Government stance supposedly encouraging new businesses but it does illustrate the number of businesses who have seen the EFG loan scheme as an expectation of funding and been surprised when turned down.
Brokers seem to be gearing up with high expectations for a raft of IPO’s expected to come to AIM and PLUS markets in the first quarter of 2010. Sentiment seems to be that investor appetite is returning for small quoted companies as investors search for decent returns. We’re a little sceptical about this as many of the funds we are in contact with, have struggled to attract new money to invest.