M&A advisors and consultants are increasingly nervous about the potential impact of the Labour Party’s inaugural Autumn budget. All eyes are on the Chancellor of the Exchequer, the Rt Hon Rachel Reeves, who recently commented via her X/Twitter account that “I am under no illusion about the scale of the challenge we face after fourteen years of low economic growth.”

Of the many measures under consideration, which have included the abolishment of the ‘non-dom’ status and significant changes to the Inheritance Tax regime, changes to the Capital Gains Tax rules are rumoured to be substantive and are causing the most concern for vendors and prompting deal makers to look again at projects in flight.

If anything, what is clear is that the landscape for dealmaking is evolving rapidly, as macro-economic and socio-political factors continue to collide. As previously reported Q2 2024 saw a strong run of Private Equity deals signalling a rebound against a backdrop of sustained high interest rates, however, any significant changes in the tax/regulatory environment will likely produce further turbulence for dealmakers.

For vendors considering a sale, a substantive change in the Capital Gains Tax regime may well trigger thoughts on the timing of any business exit. Whether due to retirement or strategic growth, any owners contemplating a sale should speak to an experienced M&A advisor/consultant without delay, along with an experienced/qualified tax advisor.

For acquirers, it is highly likely that rumours surrounding October’s impending Labour budget will have lit a fire under any strategic plans for Q4 2024. On a positive note, Britain remains a hive of M&A activity and an attractive investment destination (based on Foreign Direct Investment inflows), and whatever the outcome of the budget the presence of keen acquirers is likely to remain a feature as we close out the year.

Most M&A advisors, consultants and brokers will likely await the Autumn budget measures in a reflective mood. The market has been turbulent, seeing both positive appetite for acquisitions, and corporate and financial acquirers negotiating hard on transactions. Only time will tell if the Chancellor’s measures prove to be Christmas come early for M&A in Britain.

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