New figures published by the Office of National Statistics have revealed a fall in both inward and outward deal values and volume in Q4 2021, with a slight increase in the value of domestic deals. Outward M&A values saw the biggest fall to 3.4bn in Q4 from 32bn in Q3, which is largely due the 29.8bn acquisition of Alexion Pharmaceuticals INC by AstraZeneca in Q3. The inward M&A values decreased to 10.9bn in Q4 from 12.4bn in Q3; while domestic deal values increased to 2.9bn in Q4 from 2.3bn in Q2. In total, there were 77 completed deals in December 2021, down from 150 in September 2021 and the lowest level since the height of the pandemic in May 2020 where only 58 deals were completed. Kirsty Sandwell, partner and head of transactions at RSM said: ‘The M&A market has been in a bubble over the past year, and these figures suggest the bubble has finally burst. The consistent run of high M&A activity is unlikely to be sustainable, and it looks like the industry is taking a much-needed pause for breath. ‘Ultimately, the deal environment needs certainty in order to flourish. The uncertainty surrounding the Russia/Ukraine conflict and the rise in oil and gas prices, presents headwinds for the deal environment which means M&A activity is unlikely to rebound quickly. ‘As witnessed after the Brexit referendum, buyers tend to halt deal activity until potential implications become more apparent, so it’s likely companies will take a similar approach in the coming months. There are many investors and advisers that have never lived or worked against a backdrop of inflation and rising interest rates, which adds to the macroeconomic uncertainty. This will naturally breed some caution as the community gets to grips with the new normal. ‘It’s likely tech M&A activity will be relatively unaffected during the current crisis and will drive overall M&A figures. With oil and gas prices on the rise, this may even lead to a focus on renewables and related infrastructure

Customs duties paid by UK businesses have jumped 63% to a record £4.7bn in the year to the end of January, according to research from accountancy group UHY Hacker Young. The figures – up from £2.9bn in the previous 12 months – show that the last six months to 28 February 2022 are the six highest months on record for customs duties paid, with £2.6bn paid in that period alone. Over the past five years, the total amount of customs duties paid has averaged just £3.3bn per year. UHY Hacker Young says the rise comes as post-Brexit increases in customs duties begin to bite for UK businesses and consumers. Post-Brexit ‘Rule of Origin’ requirements have dragged far more imports into the customs duty net. These rules mean anything sold in the UK by EU businesses must wholly or largely originate in the EU to be exempt from customs duties when it enters the UK. The company adds that the tightening of the ‘Rules of Origin’ requirements looks to be already having an impact on UK businesses and consumers. From January 1, the Government introduced a requirement that importers must show a declaration about the origin of the goods at the point of entry. If a business cannot prove the origin, they face paying the full rate of customs duty and additional penalties. Sean Glancy, Partner at UHY Hacker Young, said: “These figures show that post-Brexit increases in customs costs are hitting businesses and consumers hard. With UK consumers already being hit by a cost-of-living crisis driven by increased energy costs and rising taxes, the jump in customs tariffs is the last thing they need.” “Businesses are struggling under the weight of tariff costs and additional paperwork. These additional costs are biting just as they try to recover from pandemic-related costs and interruptions.” “Since Brexit, customs duties have substantially increased costs for many businesses, in some cases making a dramatic impact on the bottom line. Businesses which are heavily dependent on trade with the EU may well be looking to reassess their models.” “UK consumers are likely to face price increases at a time when the cost of living is already rising. They may also find familiar products no longer in stock should UK businesses cut imports of EU products.”

  James Pinchbeck, Partner Streets Chartered Accountants: The government has been reprimanded for releasing details of Budgets and Statements in advance of their hearing in the House. It would seem then such advice was heeded in the case of the Spring Statement, delivered in the House on 23^rd March 2022. Little was known of what we might hear in advance. Though perhaps some may feel there was nothing to release or leak? At a time of rising inflation and living costs, for many younger workers and households, it is something they will not have experienced in their lifetime and many will have listened to the Chancellor with baited breath for measures and support to ease the burden. Whilst many were urging the Chancellor to use the Spring Statement to axe the health and care national insurance increase due to come in this April, few probably really thought he would and he didn’t. In terms of support for all households facing increased costs of living, he announced a 5p reduction per litre in the fuel duty levy from 6pm. This will no doubt be welcomed by those reliant on their car for work, particularly those living and working in rural areas where alternative lower cost travel options are not always available. Whilst we head towards the warmer months, few though will take their minds off increasing energy costs with the price cap hike due to come in from April. The number of people who can benefit from the news of the removal of 5% VAT levied on the installation of renewable energy including heat pumps, solar and wind etc, will probably be limited and lagged in their benefit for most. The Chancellor also announced an increase in the Household Support Scheme with a further £500m of support being available to local authorities to target assistance to those affected by energy price increases. When it comes to managing rising energy costs for businesses, again the measures announced were limited in that they failed to address the issues currently faced. Supply chain issues, labour shortages increasingly giving rise to price rises for consumers and energy price rises are all key contributors to overall price rises faced on goods, especially food and other key household items. His help with energy costs for businesses was limited to removing business rates due on a range of green technology used to decarbonise buildings, including solar panels and batteries, whilst eligible heat networks will also receive 100% relief. So looking at how the Chancellor sought to balance managing the economy, public debt and borrowing whilst seeking to promote growth and to help those, if not all, affected by rising living costs, what were the key announcements? In the here and now, or at least to have a more immediate benefit was the announcement that the threshold at which National Insurance Contributions are levied will rise by £3,000 to £12,570 in line with the Income Tax Threshold. The Chancellor declared that this represents a £300 tax cut for those who will benefit from the change from July 22. This threshold increase is believed to benefit some 70% of the workforce and should help to mitigate the increase due to come with the new National Insurance health and care levy. When it comes to help for businesses, the Chancellor served up a lukewarm helping of reheated announcements made previously with support around reductions in Business Rates, stating he would introduce reliefs a year earlier in April 22, through his Help to Grow initiatives and a continued focus around innovation through Research and Development tax reliefs. He did however offer support to employers, from the 6^th April, through an increase in the Employment Allowance from £4,000 to £5,000. This allows smaller businesses to reduce their employers National Insurance contributions bills each year. As his Statement came to an end, the Chancellor’s final announcement was on the proposed reduction in the basic rate of income tax from 20% to 19% before the end of this Parliament. Perhaps with a sense that this Statement was one based either on Government seemingly becoming a little jaded, running out of steam, or facing the challenges of dealing more and more with issues in the here and now as opposed taking a more longer-term perspective. With recent media coverage we might be forgiven for thinking that it was a statement that marks the start of a government laying the foundation and making preparations for a general election perhaps even as early as next year.   Further details on the announcements included in the Spring Statement 2022 along with tax changes for 2022/23 are included in Streets Chartered Accountants – Spring Statement report. https://www.streetsweb.co.uk/resources/2022/mar/24/streets-guide-spring-statement-2022/

A family-owned investment business is on track for rapid growth after securing a seven-figure finance facility. Banwait Group Holdings is a property investor and asset manager with a portfolio spanning the commercial, residential and healthcare sectors across the UK. It is the parent company of Real Estate Investments Group (REIG), which manages its investments, and Strong Life Care, a care home and assisted living provider. Banwait Group has experienced double-digit year-on-year growth every year for the last ten years, and has grown from a core team of three to more than 260 today. Now, the firm is set to move to a new office in Wakefield to enable further expansion. A seven-figure finance facility from Lloyds Bank has allowed Banwait Group to purchase the 5,500 sq ft space outright, and begin a fit-out designed with employee health and wellbeing at its heart. Facilities will include breakout spaces and mindfulness areas, as well as showers and changing rooms to enable active travel. The Group is targeting ambitious growth, with a goal of exceeding £100 million in managed assets within the next two years and expanding its care facilities to over 1,000 beds. Harpreet Banwait, Managing Director at Banwait Group Holdings, said: “I am incredibly proud of the growth we have achieved over the last decade. Our motto is ‘everyone has a life worth celebrating’ – and that underpins everything we do. It’s all about delivering the best results for our staff, tenants and care home residents, and with our new office we are ideally placed to achieve our ambitious growth plans, welcome even more talented staff, and boost the quality of our offering even further.” Stuart Harper, relationship director at Lloyds Bank, said: “Behind both Real Estate Investments Group and Strong Life Care is a team of dedicated staff helping to deliver outstanding services. Over the past decade, Strong Life Care has built a reputation as one of the best care home providers in the country, and through REIG there is a steady source of income that can be reinvested in the business to help keep making it bigger and better. “We look forward to continuing our support for Harpreet and the team as they continue on their growth journey.”

City of York Council has made grant payments worth more than £223,500 to eligible York businesses affected by the rise of the Omicron variant via the latest phase of Additional Restrictions Grant payments

Leeds-based furniture manufacturer, Craftwork Upholstery, has secured a £400,000 investment from the alternative finance provider Growth Lending to support the acquisition of the company via a management buy-in and to provide additional working capital. Stephen Frazer and Graham Niven of Frazer Hall Corporate Finance advised Richard Carr, Craftwork’s new Managing Director, on his management buy-in of Craftwork Upholstery. The funding will also provide ongoing working capital to enable the business to expand over the next three years. Established in 1991, Craftwork Upholstery manufactures furniture for various industries, including care and nursing homes and in the leisure sector for sports clubs and hotels. The company’s West Yorkshire headquarters, in the Armley area of Leeds, is home to its specially designed manufacturing facility, along with its product showroom. Richard Carr, Managing Director at Craftwork Upholstery, says: “We are very happy to have received this funding from Growth Lending and are excited at the new opportunities it will bring.  “While the management buy-in is a big change for the business, we are confident of the positive impact it will have on the high quality service that our clients and customers have come to expect and on Craftwork’s growth aspirations during the next three years.” Vicki Taylor, the principal at Growth Lending, says: “It was a real pleasure to work alongside Richard and his advisory team to structure a revolving credit facility that enabled him to acquire the business. “The funding has been structured to provide sufficient funds from day one to facilitate the purchase, as well as provide ongoing working capital to support the business through its next growth phase.”