Tax planning ahead of Spring 2021 Budget

As we approach the end of 2020 we can reflect on a tumultuous year as a result of the Covid-19 pandemic. As seen recently in the financial press, there are a number of speculative discussions about possible future tax increases. While tax increases are possible, it is also clear that the Government will need to take steps to encourage investment, to boost the economic recovery.

At this time, we can only speculate about possible tax changes in 2021 however, we do know that changes to taxation will be announced in the Spring Budget, which will take place on 3rd March 2021. Rather than leave the usual year-end tax planning until February next year, it would be prudent to bring forward this process. If you are anticipating a quieter than usual festive period, it could be the perfect time to turn your attention to financial matters.

The Chiene + Tait Tax Team has flagged some areas that may be of interest to you or your business including gifting of assets to members of your family, pension planning if the higher rate tax relief is removed from contributions or what to look out for if you are thinking of selling your business.

Our infographics below highlight further areas for consideration. If you would like to discuss selling your business, please contact Jonathan Griffiths, if you would like to discuss any tax aspects for your family, please contact Michelle Fallon or Moira McMillan. Alternatively, please email us at, we would be delighted to discussion the options available to you, your family or your business.

Areas families to consider Spring 2021
Family areas to consider ahead of 2021 Budget
Business areas to consider 2021 Budget
Business areas to consider ahead of 2021 Budget

Three things in corporate tax this week

What do all these have in common?

They are three things we’ve been thinking about this month as we’ve been:

  • Advising on when HMRC can be bound to act as promised – the starting point to establish a “legitimate expectation” being that the taxpayer has put all their cards “face upwards on the table” and sought a fully considered ruling from HMRC (per the statement in the classic case of MFK Underwriting);
  • Considering the upcoming changes that will impact personal service companies (“PSCs”) – putting the obligation to make the employee/ contractor distinction (and possibly to account for the PAYE and NICs liabilities) on to the end-users (the clients) of PSCs. We liked a description we recently heard by an advocate of the employment test as being difficult to apply as it is “open, textured and diffuse”. And this being due to it being derived from centuries of case law, which uses terms “redolent of a bygone era” e.g. “master and servant”; and
  • Assisting an American law firm with ensuring their client pays the correct amount of stamp duty on a transaction.  This was a complex case, so we recommended they go through HMRC’s adjudication process, because (as was said in the Caledonian Railway Company case over a century ago) if a person gets an adjudication stamp then “the mouth of the Inland Revenue is shut forever”.

If you’d like to discuss any concerns around HMRC resiling on an agreement, changes to PSC taxation, stamp taxes adjudication or any other tax queries (or share any interesting tax-related quotes) we would like to hear from you.


0131 558 5800

The art of corporate finance negotiation (Part 5)

This is the fifth and final blog of the series that our Partner and Head of Corporate Finance, Paul Mason, has written, based on his experience of negotiating deals successfully over many years.

Part 1 (Every conversation is part of the negotiation) can be found here.

Part 2 (Negotiate the ‘Heads’) can be found here.

Part 3 (Don’t sweep it under the carpet) can be found here.

Part 4 (Be consistent and … be consistent) can be found here.

Be true to yourself (Part 5)

The worst deal you will ever do is the deal that is simply “wrong”.  This situation is far, far worse than failing to do a deal at all, except in very specific (usually distressed) situations.

In most cases if this transaction falls over, there will be another deal, another day.  However, if you strike the wrong deal then you and the other party are stuck with it.  You can’t rub your name away in the signature block and pretend it never happened.

In the week leading up to a deal completion, we often sit down with our client and ask them if they really want to do this.  We ask them to think about what it’ll feel like after they’ve signed and they either do – or don’t – go into work the following day.  What will they be thinking in 6 months or a year’s time?

If we’ve properly identified the real reason for a transaction at the beginning, then such a session is usually comforting for the client: it might allow them to vent their frustrations over how certain parts of the process were more painful than they expected, but usually there is a solid re-affirmation of their original intentions.

The only times we’ve had clients who have wobbled is when they’ve been unsure why they want to do the deal.  They might have been swayed initially by the prospect of a financial windfall, but as they progress through the deal, the prospect of staff redundancies and the simple realisation of the current owner manager that he or she will no longer have their usual daily routine after their consultancy “transition” finishes can make them re-assess whether this is the right deal.

There’s no upside from not being honest with yourself about what you really want.

The final brush strokes

Making sure the seller and the buyer understand and express what they want from the deal is vital.  Honesty and integrity helps lessen the burden of what will be a brutal process, from Heads through to completion.  There aren’t any shortcuts to a good deal – the right deal – but there are plenty of ways to shortcut to the wrong one.

And, if you are considering embarking on an M&A process, chances are it has probably already begun.  Those initial commercial discussions that have taken place… they’re the first few strokes on your otherwise blank canvas.  Now it’s time to turn it into a masterpiece.

If you are looking to purchase or sell a business, contact Paul today on 0131 558 5800 or email


The art of corporate finance negotiation (Part 4)

This is the fourth blog in a series of 5 that our Partner and Head of Corporate Finance, Paul Mason, has written, based on his experience of negotiating deals successfully over many years.

Part 1 (Every conversation is part of the negotiation) can be found here.

Part 2 (Negotiate the ‘Heads’) can be found here.

Part 3 (Don’t sweep it under the carpet) can be found here.

Be consistent and … be consistent (Part 4)

Swapping the art analogy for another: negotiating during mergers and acquisitions (M&A) can be likened to a card game… it’s not just about what hand you have, it’s also about how you play it.  Critically, it’s not really about how valuable your hand is to you – it’s about how valuable it is to the other party.

When everything is amicable and friendly, negotiation is fun and you might even be tempted to think of it as a bit of a game.  However, there will be times when you’re convinced you’re right and you just can’t seem to make the other party understand.  The goal in these situations is two-fold: to seek to understand their entrenched position better; and to convey precisely why you hold your own view so firmly.

The key to negotiation in such situations is communication and consistency.  If something is important, you need to make sure the other side know it is important to you and therefore they need to treat it as important.  Moreover, if it’s really important, then you have to communicate that and make sure there isn’t any conflicting messaging.  We advised on a transaction recently in which we had to be careful to repeat precisely the same message to the buyer over and over again during a critical phase of the deal – which took nearly a week of carefully consistent messaging.  The risk of varying what we were saying was a lack of consistency in what we were asking for and therefore a legitimate questioning of whether it was as important as we were asserting.

Consistency also applies to the seller’s own objectives.  While these can change over the course of a transaction, if they do, it will likely be because they weren’t interrogated sufficiently at the start.  We always ask clients, “why do you want this?” and typically follow that with a further series of, “but why?” questions.  Eventually we find out the real answer.

If you are not consistent from one stage of negotiation to the next then how can the other party truly believe what you are saying?

That wraps up this fourth blog article which has focused again on tactics and approach during negotiation.  The final part will be more of a general recommendation on how to be satisfied – during and after – the deal with the result.

If you are looking to purchase or sell a business, contact Paul today on 0131 558 5800 or email

Read part 5 – Be true to yourself

The art of corporate finance negotiation (Part 3)

This is the third blog in a series of 5 that our Partner and Head of Corporate Finance, Paul Mason, has written, based on his experience of negotiating deals successfully over many years.

Part 1 (Every conversation is part of the negotiation) can be found here.

Part 2 (Negotiate the ‘Heads’) can be found here.

Don’t sweep it under the carpet (Part 3)

A lengthy, onerous and – bluntly – painful part of a transaction, after agreeing ‘Heads’, will be some form of ‘due diligence’.  This is where the prospective buyer seeks to remedy the massive “knowledge gap” between themselves and the seller.  The seller is always going to know more about the business which they have built up and lived with than a prospective buyer.  Due diligence is the process by which questions are asked, answers are provided and clarified and the prospective buyer reaches a point whereby they can make an informed decision on whether to purchase, and on what terms.

The working assumption for any seller has to be that bad news will come out during due diligence.  Whether this is financial or operational underperformance, litigation risk, or something murky in the company’s history, any assumption that it can (or should) be hidden is a foolish one.

Bad news has one of three consequences:

1. It can cause a deal to collapse;

2. It can erode the buyer’s price (or weaken the structure) versus the previous agreed deal; or

3. It can be accepted without material impact.

When advising sellers, we always want to find a way to push any bad news into that third category, which requires careful management of timing and delivery.  Hiding it amongst good news might work occasionally for politicians, but it rarely works in M&A, especially if the buyer is suitably advised and experienced.

Reflecting on the last blog post about negotiating the Heads, it is often (but not always) best for sellers to bring out the headlines of any bad news story into the open before Heads.  Whilst this can risk reducing the headline price or deal structure, at least the sellers are agreeing to enter into the next stage knowing a more realistic and deliverable deal is on the table.  There isn’t the false comfort of an inflated price, which is invariably going to suffer significant erosion when the bad news emerges.  Secondly, establishing trust requires honesty and integrity: having bad news teased out can damage this important principle.

There can be a fear that tabling bad news early will turn off a potential buyer to the point where they walk away.  Conversely, waiting until they are emotionally “in” and heavily invested in a process will surely make them less likely to back out?  Unfortunately, emotion is rarely something we want to encourage in M&A if we want to get the right deal.  The tactic of leaving bad news until the 11th hour is a gamble that I very rarely condone.

In the penultimate, fourth part of this blog series I will look at how to act during a deal and advice for managing difficult and tense negotiations.

If you are looking to purchase or sell a business, contact Paul today on 0131 558 5800 or email

Read part 4 – Be consistent and… be consistent

The art of corporate finance negotiation (Part 2)

This is the second blog in a series of 5 that our Partner and Head of Corporate Finance, Paul Mason, has written, based on his experience of negotiating deals successfully over many years.

Part 1 (Every conversation is part of the negotiation) can be found here.

Negotiate the ‘Heads’ (Part 2)

Irrespective of how amicable the transaction might be at the outset, make sure you agree a comprehensive set of Heads of Terms, which both buyer and seller understand and believe represent all the pertinent aspects of the deal.

The purpose of ‘Heads’ (a.k.a. a ‘letter of intent’, an ‘expression of interest’ or a ‘non-binding offer’) are three-fold:

1. They explain the key features of the deal;

2. They seek to flush out potentially contentious points early; and

3. They serve as a future reference point in the event of any subsequent dispute.

It is the same process as sketching out a picture, before lifting up the paintbrush: you want to position the elements of the scene correctly, without getting bogged down in intricate detail at this stage.

What are the consequences of failing to negotiate Heads, or missing out items that are important to you?   At best, you might be able to include or refine the points later in the process, but probably at the cost of goodwill, or a necessary “horse trade” for something the other side wants in exchange.  At worst, you might find that a missing item is an immovable “red line” for the other party – something that is beyond their ability to offer and becomes a reason why the deal falls over later in the process, having incurred more expense to get to the point of failure.

I have advised on some transactions where it was felt that Heads weren’t necessary.  The parties knew each other and trusted each other implicitly.  But still, having that reference point proved useful when everyone inevitably “couldn’t see the wood for the trees”.  Being able to remind ourselves of what was fundamental at the outset can help us all accelerate through those periods when we would otherwise become bogged down.

In the next, third part of this blog series I will look at how to manage (and how to mismanage) bad news during a deal.

If you are looking to purchase or sell a business, contact Paul today on 0131 558 5800 or email

Read part 3 – Don’t Sweep it Under the Carpet

The art of corporate finance negotiation (Part 1)

Turning a blank canvas into a masterpiece (Part 1)

This is the first blog in a series of 5 that our Partner and Head of Corporate Finance, Paul Mason, has written, based on his experience of negotiating deals successfully over many years.

As corporate financiers, we advise companies, owners and directors on acquisitions and disposals day-in, day-out.  The great thing about working on so many different types of transactions with so many different counterparties is the opportunity to build  our experience.

Every transaction is different, like every masterpiece in the art world. Buyers and sellers can have completely different motivations for entering into a transaction, and oftentimes these motivations evolve over the course of a transaction.  The different approaches across geographies, between sectors and from larger corporates to smaller owner-managed businesses, can be stark.

Working as an adviser, we have the perfect opportunity to be painter-turned-critic-turned-painter again.  The teachings we offer when selling companies are those lessons we’ve learned while helping buy one – and vice-versa.  Understanding how the other side will  view your transaction is critical to maximise the chance of a successful outcome and, critically, protecting the client’s interests.

Having this insight into both sides of any deal has taught me 5 key lessons which apply to most, if not all, M&A transactions, whether you are a buyer or seller. This is the first part of a 5-part blog series that covers each.

Every conversation is part of the negotiation

This is about making sure your blank canvas is really, truly blank.  It is especially true for companies that start off having discussions of a commercial nature, but which then evolve into merger and acquisition (M&A) discussions.

At every point of negotiation and discussion you need to think about what quantitative information are you providing, intentionally and unintentionally?  Also, how much soft or subjective information are you providing, especially in relation to how you act and how you conduct yourselves?  How reliable are you proving to be? The latter has a bearing on a buyer’s view of the achievability of your budgets, for example.

The important point here is, it’s not just about the “what” that you say, it’s also about the “how”.  Effective transactions usually build a strong sense of trust between the parties and form a positive relationship between buyer and seller.  Conduct yourself in the way you would wish to continue negotiations, because you’re setting a precedent in how you act.

In the next part of this blog series I will look at one of the most critical parts of negotiating: agreeing the fundamentals of the deal, or ‘Heads’.

If you are looking to purchase or sell a business, contact Paul today on 0131 558 5800 or email


Read part 2  – Negotiate the Heads

Heading for the exit door

Paul Mason, Corporate Finance Partner, has analysed the market and identified key trends. Here he reports on the exit market post-financial crisis, and the implications for business owners.

Pre-2008, there was a bull run. Businesses were being bought and sold at a fast pace. There was significant liquidity available from debt and equity investors; this resulted in a wealth of transactions across all business sizes from big to small. Post-2008, you won’t be surprised to hear that there has been a shift. But you might be surprised to hear that it hasn’t shifted too much, and that there are still plenty of investors and acquirers with capital to invest.

The state of the market

We have analysed the Scottish and UK exit market pre- and post-financial crisis and, whilst the number of transactions completed per annum has fallen, the average earnings multiple paid remains broadly in line with pre-financial crisis averages. In short, this means that there are fewer, but higher quality deals completing. There remains plenty of capital available for investment; the challenge for exiting these days is to demonstrate that your business is the one worthy of investment: that it’s a sound opportunity and that the risks are well-managed.

54% – The number of UK exits is now at 54% of the 2007 peak pre-financial crisis average.

Get ready early

Preparation for an exit will mean different things for different businesses. But one common positive step is to create optionality to deliver multiple exit scenarios – that is, have a series of sound plans (not just a Plan B, but a Plan C, D, E and F if necessary) to help maximise business value on exit. And all of your options should involve having a good, robust business with valuable assets (including staff and customers) and traits.

In advance of an exit, it is valuable to get your business into shape early. Think of it like selling a home. If you’re thinking of moving, you might give your house a lick of paint and a tidy in advance of prospective buyers coming round to view. But to add real value, to make your house really attractive, there are better, longer-term structural issues you can address. Get planning permission for that extension, or have the place re-wired. The same principles apply to a business. We call it ‘exit readiness’: identifying and sorting the big key issues that buyers will want in advance of a transaction, and making your business a more attractive investment. Completed disposals which have been through our exit readiness process demonstrate the significant value that is added by what we help you do.

Get in touch with us for a discussion on your business, what your plans are, and what kind of things you can do to prepare.

It Pays to be Nice

“Nice” is a funny word. Use it in a business context and it feels as if you are damning with faint praise. A sort of trite, pseudo-compliment which says more because it is used in place of a “proper” adjective with guts.

But it shouldn’t be like this.  In so many (if not all) aspects of business, we’re simply people dealing with people. Often, price and service levels dictate business deals, but when those are sufficiently close not to matter, human nature means we like to deal with people we like.  Nice matters.  Hmmm… not convinced yet?

In my line of work especially, assertiveness is seen as a positive attribute. An ability to persuade, an ability to bring someone else around to your way of looking at things… these are skills that separate the good from the mediocre. Where does “nice” feature in such a dog-eat-dog world?

Well: I cut my early career teeth in the post-dotcom boom investment banking world of London, working on transactions all over the world, with some fearsomely smart, high-calibre people.  Can there be any time or room for nice in such an environment? Nice costs money and money costs deals, surely?  But fast forward and at some point, boom begets bust. The people you meet as your world is going up are still there when things come back down to earth again with a bang. That’s when we really understand the true value in treating people properly.

Being nice isn’t about rolling over and being passive. It isn’t about giving into others with louder voices.  It’s about being consistent.  It’s about doing things in the right way. At its simplest, it’s about recognising your own values and ethics and making sure they are forefront of our mind when dealing with others.

When we’re negotiating hard, it’s about securing the very best position you can but stopping short of rubbing the other person’s nose in it. Always leave them with their pride intact and act graciously when you do manage to get the upper hand. Just remember: one day, there will come a time when you are on the receiving end of what you dish out.

Paul Mason is the Corporate Finance Partner at Chiene + Tait LLP