Road to Recovery

It is nice to be able to introduce this edition of E+ at a time where there is a degree of optimism in the air. Health-wise the UK appears to have stolen a march on most other countries with its rapid vaccine roll out which, hopefully, will lead to the “irreversible” release of lockdown restrictions within the planned timetable.

Business-wise, nearly all economists are predicting a strong “bounce” for the UK economy boosted, at least in part, by the pent-up consumer demand (as well as savings and government stimulus in their pockets…). They’ve been wrong before but let’s hope it all comes true. I have a feeling however, that there will be bumps in the road along the way. Certain industries – such as hospitality – have literally got to start from scratch and tend to only really start making money once they reach near capacity levels at their venues. If social distancing remains to any great degree, then it will be a real challenge for affected businesses to return to profitability in the short term.

In this newsletter Mark Upton, our Head of Business Recovery, looks at some of those “bumps” that are going to present themselves as obstacles for businesses over the coming months. The eventual turning off of government stimulus (be it furlough, HMRC’s approach to debt collection or supported lending schemes requiring repayment) will have quite a dramatic impact on businesses and the people that work for them. That package of stimuli has allowed businesses much needed time to make long term decisions, but it has also put off the inevitable in certain situations. As ever, taking early advice is essential if there are issues that worry you and we would be pleased to help any of our clients plot a way through.

The other hot topic for office-based businesses is how and when people will return to the office. Some prominent businesses have said that they never will. Their staff will “work from anywhere” which could be home, client’s premises, a serviced office location or even the local café. There will inevitably be a reduction in demand for office space in larger cities, as this filters down, and as lease events occur over the next few years. Most businesses that we talk to however, wish to strike a balance – taking the best of both approaches – creating an agile workforce who can work from home for some of the time but with a clear and strong cultural pull towards being in the office with colleagues for the majority of the time. When it is safe to do so, this is the approach that we will take as we think it is best for our business, the development and training of our apprentices and for client service.

We have also had a Budget since our last edition and there are a number of articles in the newsletter that deal with the changes to the tax regime as a result. The introduction of the “Super Deduction”, that seeks to reward those companies that invest in capital equipment, was fairly prominent in the Chancellor’s speech however, Robert Leggett shows on page x that, like most perceived tax giveaways, there are some important issues to watch out for before diving in.

The Budget was ultimately silent on changes to capital gains tax (CGT) despite some pretty strong rumours that it was set to increase significantly. The rumours helped to buoy M&A activity in our Corporate Finance team who continue to be extremely busy helping clients buy and sell businesses as well as secure funding. As described in more detail on page y, 2020 was a great year for our CF Team as they completed a record number of transactions which saw them top the league table in the whole of the East of England. They have also recently won “Private Equity Deal of the Year” at the coveted Insider M&A Awards for their part in the Vanilla Electronics deal. This is a remarkable achievement given the majority of that year was spent working remotely, sometimes completing transactions without ever meeting the people involved!

Finally, in this edition we introduce Zoe McLaughlin in our popular Meet the Team interview. Zoe has recently been promoted to Associate Partner which adds further to the number of colleagues who have been with the firm right through from trainee level. Internal promotions like this really endorse the training and development culture at Ensors and it is great to add Zoe to the senior team, even if I have now found out that she is a TV soap addict!

I hope you enjoy reading our newsletter and wish you all the best.