We understand that selling your business is one of the most important decisions you will make so it is imperative that you plan and get it right. To prepare business owners for this transitional period, we have designed a series of workshops which provide insight into all aspects of exit planning. The third in our series of workshops will cover everything you need to know about the exit process. Our head of Corporate Finance, Nigel Barratt will present alongside Ian Dawson, associate partner and Ryan Niblock, corporate finance executive.
We have strengthened our tax advisory team with the appointment of Nia Thomas as a manager. Nia, 38, who lives in Altrincham, has 13 years’ experience as a personal tax specialist.
Welsh-speaker Nia has returned to the north west after three years at Dixon Wilson in London. She previously worked at Morris & Co in Chester and Ernst & Young in Manchester.
Her career has seen her advise in particular high net worth individuals, including non-UK domiciled clients affected by increasingly complex tax rules in Britain.
Nia said: “I’m delighted to be back in the north west and to join the growing tax team at HURST. The firm has a varied range of clients and I look forward to working with them to advise on their tax matters.”
Nia Thomas | Tax Manager
Rachel Murphy, who heads the HURST tax team, said: “Nia is a well-regarded specialist with extensive experience of advising high net worth individuals on all areas of tax. “Her skills add greatly to our existing capabilities in helping our clients manage their personal tax affairs.”
Nia’s arrival follows a strong period of recruitment for HURST, which in recent months has expanded its corporate finance and business services teams with a series of appointments.
The firm has also established a specialist tax compliance team to help companies amid a crackdown by HM Revenue & Customs on tax avoidance and evasion - read more about this by clicking here.
A delegation from HURST declared Manchester and the north-west ‘open for business’ when they flew the flag for the region at a corporate Brexit event in the Netherlands. HURST chief executive Tim Potter and partners Paul Brown and Simon Brownbill said the region offers the best alternative to London for European companies looking to mitigate the effects of Brexit on their operations.
The trio were invited to speak at a summit for Dutch firms held at the Rotterdam offices of global bank ING Group. The event was held in conjunction with Visser & Visser, a Dutch practice which like HURST is a member of the PrimeGlobal international association of independent accountancy firms.
Representatives from around 30 Dutch firms attended, including IT, tourism and leisure companies, manufacturers and exporters. Its aim was to provide insights into doing business in the UK against the backdrop of Brexit.
The HURST trio said Manchester has plenty going for it, having been named as Europe’s third most influential city, the first for competitiveness, a top 10 location for connectivity and the best UK city in which to live. They said that it is the best alternative to London for overseas companies seeking to mitigate the effects of Brexit by having a UK presence or expanding their network of trading partners. The capital is overcrowded, competitive and expensive as a market entry point, they said.
L-R: Paul Brown, Simon Brownbill, Wilbert Snoei, Tim Potter, Erik Klop
Simon said: “Britain is the Netherlands’ second-biggest trading partner after Germany, and there has been steady growth in trade between our countries over recent years.
“Many of those at the event were worried about Brexit’s impact on their businesses. While they felt Britain would be okay once we leave the EU, they were concerned about its effect on them.
“There seems to be a strong appetite among Dutch firms to invest in the UK, and they understand that it may be beneficial to accelerate their plans to set up a branch here as Brexit nears.
“Most businesses expect the Brexit negotiations to result in a free trade agreement that maintains the status quo between the UK and EU countries.
“However, if it all turns out differently and the borders go up, they may struggle to get goods in and out of the UK. “With this in mind, companies should be meeting potential UK trading partners and exploring other kinds of business relationships relevant to their operations, for example in terms of distribution or setting up a branch in Britain.
“Our message was that Manchester and the north-west are great places to set up. Some of those at the event already have a UK presence while others are considering it.
“As a firm, we are receiving a lot of inquiries for businesses in a number of EU countries looking to establish a presence in the UK.
“We have a proud track record of helping them and continue to be active in this arena.”
If you are considering an international venture and would like any guidance or support, feel free to contact us by clicking here or by calling 0161 477 2474
Companies based in the north-west are among a growing number of overseas businesses looking to establish a presence in Italy, the world’s eighth largest economy. They are doing this through acquisition and by setting up representative offices, branches, and subsidiaries in an attempt to gain a foothold in a market of 64 million consumers.
HURST hosted a ‘Doing Business in Italy’ workshop as part of its Executive Insight programme which helps entrepreneurs to drive growth in their companies. Among those attending were executives of businesses in sectors including distribution, healthcare, finance, and marketing. The event was held with Barclays at HURST’s offices in King Street, Manchester.
The guest speaker was Alberto De Giorgi, a partner at Milan-based STUDIO DE GIORGI e ASSOCIATI which, like HURST, is a member of the PrimeGlobal international association of independent accountancy firms. Alberto specialises in advising companies on the operational and technical aspects of setting up in Italy. His practice currently has clients from 34 countries who are exploring opportunities or are launching operations in his native country.
Sectors which are seeing major activity include pharmaceuticals, business services, manufacturing, fashion, engineering, tourism and hospitality and healthcare, he said. Explaining some of the benefits of setting up in Italy, Alberto said establishing a representative office is a good first step for many companies.
There are no tax or VAT implications, but staff have to be put on the payroll and this involves significant cost to the employer, as national contracts with the country’s trade unions are in place and social security contributions are required. Alberto said that, once new entrants have gained an understanding of the Italian market, they can move on to the next stage by creating a branch of their home-based entity or a subsidiary.
A branch structure spreads the entrepreneurial risk between the company’s own country and Italy. A branch has to be VAT-registered and have an Italian tax code, but there is no requirement to file separate financial statements for it. Alberto said the rate of corporation tax in Italy is currently 24 percent, and there are regional taxes to pay on top, of between three and five percent. Subsidiaries do have to submit financial statements, including those of the mother country’s entity.
He said business owners should consider different ways of establishing a subsidiary in Italy, including a limited liability company, and pointed out that it can take just one month to be up and running. A major change on the horizon is the requirement for electronic invoicing only from January 2019 for national suppliers. Invoices will have to be sent to the tax authorities first, as part of a government clampdown on fraud.
Alberto said: “It’s a big change, which in some ways is a great leap forward as well as being a challenge.”
Alberto De Giorgi | STUDIO DE GIORGI e ASSOCIATI
He also explained some of the tax advantages of having a presence in Italy, including reliefs on capital investment. The government is also offering incentives to companies which employ unemployed people or young people.
HURST partner Paul Brown, the firm’s head of international tax, said Italy is an attractive option for UK business looking to expand overseas but warned they can face a double tax whammy. He said:
“It’s important to be well-prepared before taking the plunge, and from a UK perspective, it’s vital to carefully consider the type of entity you are looking to establish.
“If you set up a branch, the profits will be taxed in the UK and possibly in Italy too. However, if it is expected to make losses in the first couple of years, these can be offset against UK profits.
“There are tax pitfalls of having a subsidiary. HM Revenue & Customs will often look at these and decide to tax them as, although they are registered in Italy, they are controlled in the UK. This can mean they are taxed here as well as by the Italian authorities.
“It is generally possible to offset Italian taxes paid against UK tax. However, without proper planning, this can still lead to additional, unexpected tax costs.”
Barclays’ Stephen Edwards said the bank was committed to supporting UK businesses as they seek to grow their exports. “We have a strong team working across different industries. We are specialists in giving companies the right advice in the international trade arena,” he said.
If you're considering setting up in Italy, feel free to contact us by clicking here or by calling 0161 477 2474
"On 6 April 1988 I started my corporate finance career and although I don’t honestly know, I have probably been involved in circa 200 transactions or so.
The vast majority of my transactions have involved owner managers wanting to sell their business. Some owners are working to a plan with clear timelines but most do not and a sale results from a life event, an approach from a potential buyer or a gradual realisation that the enjoyment has gone. A frequent underlying theme is that having built a successful business, owners start to become risk-averse and are reluctant to push for growth which results in them managing rather than pioneering.
Over the last 30 years, the mergers and acquisitions market has become massively sophisticated with multiple solutions available to business owners looking to deal with the issues outlined above. A straightforward sale of 100% of a business to a third party is no longer the only option. The growth of private equity, high net worth investors, cash flow and asset-based lending mean SMEs have access to finance that can result in a multitude of outcomes. The ability to access some cash but retain equity can re-enthuse owners.
In my experience, business owners rarely understand the range of options available and it’s my job to make sure clients understand and explore the different available options. Having access to such a wide variety of solutions has made the last few years as exciting as any in my career.
Nigel Barratt - Head of Corporate Finance
Over the last 30 years, it’s been my privilege to have worked with great people and businesses, I have tried to identify some consistent characteristics of the great businesses I have worked with:
- Successful businesses require absolute commitment and owners/managers must be passionate about their service/product and be able to convey that passion to staff and customers
- Nearly all the successful business owners I have worked with are good with their staff in a natural rather than a rehearsed way, they inspire loyalty but aren’t soft-there is generally a close inner circle of longer-term staff prepared to tell leaders the truth
- Business leaders must make decisions, in smaller businesses those decisions will not necessarily be made with all the available facts to hand. When making such decisions a confidante who will give you advice rather than agree with you is important, I am a big fan of non-executive directors with business experience
- Successful business owners are resilient and see problems as a challenge, positive thinking differentiates leaders
- Business owners generally have great intuition about their business often unsupported by data and instinctively know when things are going well or less well. They also know the important numbers in their business and have a few KPIs that are produced daily if not weekly
- Finally, they stay in touch with their industry, know the key customers and are aware of the macro trends
So what advice could I give a business owner over and above these points?
As both an accountant and a partner in a great firm of accountants, you might not be surprised that I would mention how vital a good finance function is, your finance function should, in turn, be supported by great external advice from your accountants.
A transaction of any description places a huge burden on a business but particularly on the finance team, so investing in quality systems and people will not only make your business more efficient but will enable you to command better value in a transaction.
Before I sign off and get on with the rest of my career I would like to say thanks to all the great clients who have placed their trust in me and to the partners and staff of HURST for supporting me, with a particularly big thank you to my current team for their wonderful support."
If you would like to speak with Nigel to understand the different options available, please feel free to contact him by clicking here or by calling 0161 832 6633
Mustard Tree was HURST’s charity of the year for 2017 and staff raised a total of £9,560.65 for the Manchester based organisation, smashing their target by more than £2,500.
They undertook fundraising activities ranging from a staff sleep out and a cycle ride through Belgium, the Netherlands and France to a football tournament, raffles and bake sales.
Mustard Tree provides food, furniture, clothing and training for people across the region. It has its headquarters in Ancoats, Manchester, and sites in Eccles and Little Hulton, Salford.
Sophie Appleton, the charity’s corporate partnership manager, said: “HURST has been a truly valued corporate partner of Mustard Tree. The staff have been innovative with their fundraising ideas, which were inclusive of all. The team were fully behind our cause and the money they have raised will make a big difference.”
HURST partner Simon Brownbill said: “It’s been a pleasure working with Mustard Tree over the past year. Homelessness is a big problem in Manchester and, as a firm, it was really important to us to give back to the community and make a difference to those trapped in poverty.
Pictured L-R: Chris Kinsey, Sophie Appleton & Simon Brownbill
“We’re extremely pleased with the amount we have raised, and we thank everyone who helped us to exceed our target of £7,000.
“It’s great to know that these funds will enable Mustard Tree to continue supporting those in need in and around Greater Manchester.”
HURST staff have chosen MedEquip4Kids as the firm’s charity of the year for 2018.
MedEquip4Kids raises money to provide paediatric medical equipment and facilities for hospitals and community health teams.
Simon added: “MedEquip4Kids plays a vital role in helping to improve the health of children and babies across the UK and we are looking forward to playing our part in assisting the charity with its great work.”
To find out more about HURST's new charity of the year, click here or use the button below to help us support this great cause!
For businesses with a turnover above the VAT threshold (currently £85,000), there are going to be imminent changes to how VAT returns can be submitted. The changes may mean that businesses need to manually enter tax returns through the online HMRC portal, rather than through existing accounting software if it is not Making Tax Digital (MTD) compliant.
From April 2019, there are increased obligations on businesses to keep records digitally which could have a significant impact on your current business processes. In addition, businesses will only be able to submit VAT returns through MTD compliant software which means that the days of paper returns and manual returns through the HMRC portal are numbered.
Is your software compliant?
Not all software companies are planning to make the current version of their accounting software compliant, meaning businesses may need to upgrade to newer MTD compliant versions. In order to ensure you can to comply with MTD obligations, we recommend contacting your software provider to understand what this means for you.
A number of software companies are transitioning to a subscription costing model which represents a move away from the previous “license purchase” approach - this will result in a monthly cost for the life of the product with support and updates included.
What are your options?
Companies will either need to upgrade with their current provider, potentially under the subscription model or consider alternative software solutions available to suit their financial and accounting needs.
Upgrading or changing your software is not a straight forward decision and the associated costs under the new subscription model will, in many cases, be significantly higher than your current costs.
We are happy to help you understand your obligations under MTD and set out the options available.
We will be holding a Seminar on Thursday 10th May to demonstrate “Xero” and “Sage”. Both are cloud accounting software packages capable of linking to various add ons, helping streamline accounting transactions. Both software packages are also fully MTD compliant.
Internal and third-party cloud accounting experts will be providing further insight on which package will be best suited to your business needs. There will also be live demos of each software package, so you can familiarise yourself with the different features and capabilities.
To make sure you are getting the best value for money and the right package for you, call 0161 477 2474 to discuss your options, understand the best way forward and also have access to exclusive discounts on selected licences.
Partner Nigel Barratt and corporate finance manager Ben Bradley advised Stockport-based Karomed on the transaction. Paul Johnson and Rachel Clarkson of law firm Ward Hadaway provided legal advice.
Karomed offers a wide range of pressure care products, including mattresses, beds, chairs and cushions, along with other complementary services to meet the needs of patients and carers in the NHS and private healthcare sectors.
The Transflo Cushion has been in the pressure care market for more than 30 years and is one of the UK’s leading high-risk gel cushions used in acute and community care settings.
Direct Healthcare, which is based in Caerphilly, is a leading manufacturer of pressure care products.
The Transflo Cushion deal is its third bolt-on acquisition since private equity firm NorthEdge Capital backed a management buyout in April 2016.
Direct Healthcare will assume all sales of the product following the transaction.
Ben Bradley said: “The Transflo Cushion is an extremely popular and proven product which has significant potential for growth.
“Its sale will enable the Transflo brand to achieve its full potential and allow Karomed to focus on its other products.
“I’m certain that the Transflo brand will go from strength to strength globally under the ownership of Direct Healthcare.”
Karomed managing director Emma Teasdale said: “We have been extremely proud of the development and popularity of the Transflo Cushion within the UK market.
“Direct Healthcare can now take this a step further.”
Graham Ewart, chief executive of Direct Healthcare, said: “The acquisition of the Transflo Cushion range enables DHG to offer Transflo customers an enhanced provision of service and product quality through our ISO 13485 accredited business management system.
“By increasing our product offering we ensure that we are providing innovative, market-leading pressure care management that makes a real difference to our healthcare professionals and the patients they provide care for.
“DHG’s global network will allow the Transflo Cushion range to be offered across Europe and Asia-Pacific for the first time, providing a strongly regarded, high-risk preventative product worldwide.
“This represents our continued intent to deliver pressure care solutions that provide value and benefit to our healthcare providers.”
Andrew Skinner, investment manager at NorthEdge Capital, said: “The team at DHG has continued to grow the business both organically and through the acquisition of specialist products and brands.
“This latest deal adds to the group’s diverse portfolio and supports further its growth in the healthcare market.
“The Transflo Cushion is highly regarded in the market, so we are pleased to welcome the product to the group and support DHG’s focus on providing outstanding patient care solutions.”
If you are thinking about an MBO, business disposal, or an acquisition please contact us at email@example.com
Research suggests that workplaces are changing and increasingly feeling the impact of managing multi-generational teams – a team made up of colleagues from a variety of different generations or age groups. The various generations each have differences which, when they work together, can create challenges and opportunities.
Before we delve further into this, it’s worth familiarising ourselves with the common generational classifications:
- Baby boomers, or ‘boomers’ were born between 1946 and 1964.
- Generation X were born between 1965 and 1980.
- Generation Y, also known as ‘millennials’ were born between 1981 and 2000.
- Generation Z were born between 1995 and 2015.
Increasingly, ‘boomers’ are being retained and members of Generation Z are coming into the workforce at 16 or 18 via apprenticeships or school leaver programmes. Furthermore, it is predicted that the workforce will age substantially over time, as many of today’s ten-year-olds are predicted to live until at least 100, if not longer.
The result of these changes is that workplaces are seeing a clear shift from employing two generations to three or even four. Clearly there are differences between individuals in their outlook and approach to work, but across generations there are also common employment benefits and challenges. These can be best observed by looking at the two generations furthest apart.
First of all, if we look at Generation Z, we see that the employer benefits from cost-effective recruitment and salaries. They are generally easier to train, giving the business a supply of people with the specific skills and qualities that it requires. They are also tech-savvy.
However, there are some drawbacks to employing this generation. They often place greater value on life outside of work and are consequently less willing to put in the hours, yet they still have high salary expectations. There can also be practical issues, as emotional stability is under-developed and perhaps they do not drive or cannot necessarily afford the correct working attire.
Simon Brownbill - Head of Practice Development
Next, if we look at the boomer category, we also see some clear benefits to the employer.
The benefits to employers of this older generation include the fact that they often have strong client relationships and networks. This experience also means they can deal with a range of personal and commercial situations and have stronger leadership and communications skills.
However, they can be resistant to change and slower to adopt new technology. Inevitably they also tend to have more health issues than younger employees. But perhaps the biggest drawback to employing older colleagues is that often they are hardest to replace, and you only miss them when they are gone.
So, what can employers do to alleviate and indeed harness these differences?
We are seeing a growing increase in the number of firms looking at how to use multi-generational teams to their advantage. Typically, this is enabled by ideas such as:
- The use of common technology platforms accessible via different devices: This means that one generation more comfortable with hand-held devices can interact and work effectively, and so can those who are more comfortable working on desktops.
- Multi-use workspace can encourage team work across the generations and give employees the ability to work in a way that is most effective for them all whilst enjoying collaboration with colleagues.
- Mentoring and coaching: There is a good natural fit for the older generations to mentor and coach the younger ones, offsetting some of the issues previously outlined.
- Attracting and retaining older colleagues as well as younger ones: There can be a tendency to focus on attracting and retaining younger colleagues. Indeed, with retirement ages set to dramatically increase, and workforces ageing, attracting and retaining older colleagues is likely to become much more of an issue. Older colleagues can be retained via pre-retirement sabbaticals, changing to part time contracts or consultancy agreements.
Finally, for those leading multi-generational teams, a useful analogy to think about is your own family: You may feel at times like you are holding it all together looking after both your kids and your parents who are equally demanding but in their own different ways – it’s the same in business. Like a family though, at the end of the day, you are all in it together and want the very best for each other.
If you would like to hear more on managing multi-generational teams, feel free to contact Simon Brownbill by clicking here or call 0161 477 2474