Stability in autumn budget could bring increased M&A activity before April, say WHN expert

The UK’s mergers and acquisitions (M&A) market could see a flurry of activity between now and April, when the tax burden will increase on those selling their businesses, according to a corporate legal expert.

Paul Matthews is director and head of the corporate and commercial team at North West law firm Woodcock Howarth and Nuttall (WHN) Solicitors, which has eight offices in Lancashire.

He suggested the lead-up to the government’s autumn budget last week had affected the M&A market, with some businesses looking to complete deals quickly before chancellor Rachel Reeves’s statement, and others trying to determine if there would be any implications announced which would be likely to affect transactions.

However, there were no significant tax changes affecting the M&A market announced in this year’s address, which Paul said could, in itself, give businesses confidence. 

He added that with increases to Business Asset Disposal Relief (BADR) set to take effect from April next year, there could now be an increase in activity over the coming months with selling owners looking to complete deals before this deadline to avoid paying higher tax.

He said: “This year, there was very little announced in the budget which is relevant to corporate transactions. We have already had the bad news in the 2024 budget with the increases to BADR.”

Business Asset Disposal Relief (BADR) reduces Capital Gains Tax when entrepreneurs sell their business. 

A cut to this relief was announced in last year’s budget and is being introduced in phases. From April 6, 2025 the 10 per cent tax increased to 14 per cent. This is due to increase again from 14 per cent to 18 per cent on 6 April 2026.

Paul added: “We saw a lot of initial activity following last year’s budget when the announcement was made that BADR would go up from 10 to 14 per cent, with people looking to complete deals before April. 

“I think we could again see additional activity before 14 per cent becomes 18 per cent in April 2026.”

Paul specialises in supporting clients across the North West with a variety of corporate transactions including sales and acquisitions, management buyouts, company reorganisations, shareholder agreements, joint ventures and partnership agreements.

He added that currently there were currently a lot of retirement sales driving transaction activity in the North West.

He said: “There is a trend of owner-managers who have developed their businesses over a long time now assessing their exit options.

“We saw after the pandemic a lot of individual business owners re-evaluating what they wanted to do with their lives. The period since this has seen businesses face a variety of increased costs including to national living wage, employers’ National Insurance Contributions as well as many struggling with recruitment.

“With the increasing tax on business sales from April, these factors and encouraging those who are of or approaching retirement age and are able to retire to do so.”