Budget Comment: Faye Cook, Thomson Snell & Passmore

News Posted 04/03/21
Faye Cook, partner in Thomson Snell & Passmore’s corporate team, comments on the Budget

“Following the Chancellor of the Exchequer, Rishi Sunak’s, statement in the House of Commons, many businesses across the UK will be pleased to see a planned route out of the economic uncertainty caused by the on-going Covid-19 pandemic.

“Overall the messaging of the Budget was positive, and the continued support for businesses ties in with the government’s plans for staged re-opening of different sections of the economy throughout the year. This will certainly provide business-owners with some further breathing space to evaluate how best to streamline and consolidate their businesses without having to worry about any immediate tax or other significant financial changes as they embark along the road to recovery.

“However, it remains to be seen whether the support provided under this Budget, and during the pandemic as a whole, will be enough to enable businesses, particularly those in the worst hit sectors, to survive unscathed. We anticipate that there is likely to be an increase in distressed M&A activity later on in the year. The Chancellor also did not make any announcement in relation to changes to the current Capital Gain Tax (CGT) regime, which were widely rumoured before the budget. The anticipated CGT changes provoked a flurry of pre-budget M&A transaction activity, which may well be repeated if such measures are to be on the agenda in the run up to the Autumn or future budgets.”

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