Prospective business purchasers in the gardening industry need to act quickly and get their finance in place to be ready to complete deals as sellers take advantage of tax breaks ending in April next year, according to Mark Blayney, director of Creative Business Finance.
The announcement in the Chancellor’s pre-budget report signalling the withdrawal of taper relief from April 6th 2008 means business owners have only the next few months to sell their businesses while taking advantage of an effective tax rate of only 10 per cent on their capital gain. After April 6th the lowest tax rate will be 18 per cent – still attractive compared to income tax but a substantial increase which will considerably reduce the proceeds from what is usually a business owner’s most valuable asset.
“Sellers will be looking to beat the deadline before they are hit with what for many will be an 80 per cent tax increase, so it’s a bit like being in competition to buy a house. The buyer with the most secure funding arrangements which can be relied on to complete will be best placed to win the deal and to achieve the best price,” said Mr Blayney, who recently launched a new self-help website – creativefactoring.co.uk – to assist SMEs with fund raising and writes and speaks extensively on finance and business issues.
Creative Business Finance is run by a small team of professionals working across the UK from offices in London and the North East.
