Sector Insights – Self storage
For a relatively new industry in the UK, self storage facilities are in almost every large town and city.
With prominent, brightly coloured buildings, a large proportion of the population will recognise the industry and the biggest brands. The incredible growth of the self storage industry in the last twenty years has been fuelled by ever increasing demand from both commercial and domestic customers.
Please see below our self storage sector report covering views on the future of the UK self storage sector and our thoughts on mergers and acquisitions activity in the sector.
If you would like advice about disposals, acquisitions, or fundraising opportunities in the self storage sector, please get in touch with our knowledgeable corporate finance team for a conversation about your options.
Download the PDFA view to the rest of 2022: What’s on the horizon?
A hint of excitement is in the January air, as many defiant businesses look ahead to the rest of 2022 and welcome the changes and challenges it promises.
As a fresh year gets underway, many businesses are facing the next 12 months with a feeling of anxious uncertainty.
Although the recent Omicron wave seems to now be showing signs of abating, the seasonal period was gloomier than many businesses were initially anticipating. After significant financial hits due to the swathe of customer cancellations and staff shortages plaguing them since December, many are now looking to the uncertain terrain of 2022 – which features legislation changes and innovation opportunities to embrace.
It seems as though the plucky British business sector has rallied once more, confident that they can continue to diversify and thrive in the face of challenges.
So, what exactly is on the map for businesses and their finances for the rest of 2022?
Talking tax
National Insurance Contributions (NICs)
Announced prior to the Autumn Budget in October, Prime Minister Boris Johnson stated that, in order to aid the health and social care sector following the impact of the pandemic, there would be a 1.25 percentage point increase to NICs for the 2022/23 tax year. Predominantly affecting employers and employees, the funds generated from this will be ringfenced for the health and social care sector.
Making Tax Digital (MTD) for VAT-registered businesses
From 1 April 2022, all businesses that are VAT-registered in the UK – regardless of turnover – are required to digitally file their tax returns via MTD. Thus, every affected business should have signed up to MTD for their first VAT return; failure to do so will incur a penalty charge.
It’s important to sign up for MTD at the correct time to avoid paying VAT twice: no less than 5 days after the last non-MTD VAT return deadline date, and no less than seven days prior to the first MTD VAT return deadline date.
Going green
Plastic Packaging Tax
The UK’s Plastic Packaging Tax (PPT) will take effect from 1st April 2022 and will affect any businesses that manufacture plastic packaging in the UK or import it from the EU. From the above date, all finished, filled or unfilled plastic packaging will be subject to PPT – calculated at £200/tonne – if any plastic components contain less than 30% recycled plastic. This also applies to packaging made up of different materials, where the overall mass is predominantly plastic.
Green Finance Roadmap
In a bid to fulfil their ambition to ‘green’ the financial system, the government published the ‘Greening Finance: A Roadmap to Sustainable Investing’ policy paper in October 2021. The document, which is aimed at investors, tightens expectations and regulations to discourage investment in counterintuitive markets, such as non-renewable energy and other carbon-emitting sources. In 2022, the government hopes to implement the first phase of this strategy, which includes reporting on Environmental, Social, and Governance (ESG) factors related to sustainability and the climate. Thus, from 6 April 2022, it will become mandatory for all companies to report their carbon emissions and associated costs.
‘Greenflation’ of commodity prices
ESG reporting has been on the radar of businesses and financial institutions for a while now, with many companies actively choosing to disclose this information to investors prior to it being enshrined in law in April. This has led to a so-called ‘greenflation’ effect on prices, where tightening regulations and government-driven spending on green materials such as copper have spurred increased demand and have, therefore, driven up prices.
The Brexit effect
Customs changes
For some businesses, 2022 will be the first year that they’ve been significantly impacted by Brexit. From 1 January 2022, customs checks will be much more stringent: where manufacturing or processing of goods is not sufficient to grant EU origin status, a formal declaration confirming origin must be provided by the supplier before the exporter can issue a statement of origin. It’s expected that this will significantly impact both the importing and exporting of goods by delaying transport and driving up costs.
Budget promises
VAT rate for hospitality, leisure, and retail
After having enjoyed a reduced 5% VAT rate until October 2021 and the subsequent 12.5% rate, the hospitality, leisure, and retail industries should now start preparing for the return to a 20% VAT rate in April 2022 – although this is believed to be dependent on the status of Covid nearer that date.
Residential Property Developer Tax
From 1st April 2022, a new tax will be applied to any company profits deriving from UK residential property development. Profits exceeding the annual allowance of £25 million will be taxed at 4%. For companies that exist as part of a group, this £25m annual allowance will be allocated by the group to the group companies.
Changes to Recovery Loan Scheme
The Recovery Loan Scheme, which currently allows SMEs access to pandemic-related recovery funds, has been extended until 30th June 2022, with a maximum of £2 million available for each business. An accredited lender from which to access Recovery Loans can be identified on the British Business Bank’s list.
Staying on trend
Cryptocurrency trading, clean energy, and inflation
Investors, financial experts, and business leaders all predict that three overarching trends set to dominate the UK’s business and financial sectors will be those that primarily emerged in 2021: cryptocurrency mining and trading, which has seen such a huge spike in the past two years already; clean energy and sustainability; and, with wholesale prices driven up by high demand and scarcity, inflation.
With change abounding in the year ahead, an unstable financial backdrop, and businesses having to ensure that they are ready for upcoming legislation changes, it looks likely that 2022 will be a year of planning, preparation, and mitigation for many.
If any of the upcoming changes listed are likely to affect your business and finances, and you would like to discuss any potential impact further, please do not hesitate to get in touch with one of our dedicated experts.
Download the PDFAutumn Budget 2021
On Wednesday 27th October, the Chancellor announced the Autumn Budget amid a backdrop of slowing economic growth, the end of furlough support, and looming financial hardship for families and businesses.
In his speech, the Chancellor declared this Budget as heralding an ‘age of optimism’, outlining a number of levy and relief extensions, increased spending across all sectors, and changes to existing legislation and support that aim to aid the UK’s recovery in a post-pandemic climate.
Download our comprehensive summary below to see a detailed overview of the key announcements made in the Chancellor’s speech and look beyond the key headlines – lesser-known changes that may impact your business and/or your personal finances are included and commentary or further explanation is included.
If you have any questions regarding any of the topics mentioned in the Chancellor’s Budget, 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.
Download the PDF
Deal Dispatch – Issue 37
Welcome to our Corporate Finance division’s regular deal round-up.
Market overview
It’s been an intense year for dealmaking, with the UK recording the second highest ever volume of transactions in a quarter. I imagine annual deal volumes will also be at record levels when they are published. Whilst it’s understandable that sellers want to de-risk, given the current environment and to beat potential CGT rate increases, it is interesting that there is no shortage of acquirers. Demand is outstripping supply, which in some circumstances is leading to an increase in deal values. We have achieved some fantastic results for our clients in the last quarter. We expect high activity levels to continue into 2022, as liquidity should remain strong whilst the risk of a CGT rate rise is likely to continue to drive more owners to exit.
Darren Hodson, Corporate Finance Partner
Download the PDFDeal 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
Download the PDFDeal 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
Download the PDFCorporate 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.
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
Download the PDFYear-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.