Not just James Dyson, but ALL businesses wanting to ensure shareholder value sits in the right place, need to start understanding value asap.<\/p>\n
<\/p>\n
We set off with a bang last Friday as our workload this month is intense.\u00a0\u00a0This is not least because we will be launching a new version of our Valuation Tool at the end of the month, so there is effort going into its final tweaks.<\/p>\n
Notwithstanding the comments above, we are very much open for business.<\/p>\n
Predictions are a dangerous game, but I can safely say that the EMI changes in the Budget are likely to bring a new type of work to us \u2013 sorting out valuations of larger and more mature companies that now want to establish AMV and UMV,\u00a0so they can either launch or enlarge their share option scheme.\u00a0 We may also see a commensurate drop in the need for growth share plans in this context, although we are anticipating much more use of growth shares for other purposes.<\/p>\n
Intelligently designed share classes can make a significant difference to where equity value sits on any one day.<\/p>\n
Reflecting on last year, and what it means for how we can help you in 2026, there are a few things that might be helpful.<\/p>\n
Our team has grown so we can take on more work.\u00a0 They are also getting more qualified and this year we will be looking to either train up or hire a chartered tax qualified individual or two (if you know of anyone who is commercially minded, qualified and, even better, also has a legal background, please put us in touch!).<\/p>\n
As well as UK companies,\u00a0we are increasingly performing valuations for businesses where the IRS is interested.<\/p>\n
We are getting involved in\u00a0progressively more\u00a0sophisticated and complex valuation projects, including helping to design cap tables such that they are fit for purpose.\u00a0 This activity has attracted the attention of many families as they undertake IHT planning.\u00a0 I do think that having crossed the Rubicon on where IHT will fall, only a revolutionary new government won\u2019t be increasingly seeking to tap this source of tax.<\/p>\n
Therefore it is increasingly imperative\u00a0that\u00a0where wealth is in the hands of a family, the planning starts yesterday.\u00a0\u00a0James Dyson may have gone on record, but his comments will be resonating with the hundreds of thousands of valuable family businesses registered in the UK today.<\/p>\n
A segue to what I will speak about in a minute is the likely rise in the use of EOTs.<\/p>\n
Although no longer supremely tax advantageous for exiting business owners, this route will still be very attractive for many.\u00a0 Intelligent use of an EOT with other structuring\u00a0could lead to some clever transactions which work for all.\u00a0 Do call us if you want to discuss some of our ideas around where to allocate value in scenarios involving EOTs.<\/p>\n
In a nod to the second quarter of the century and hopefully with us now comfortably post pandemic, I think it is worth discussing the issue of employee incentives.\u00a0In a world where it\u2019s back to the office,\u00a0there\u2019s\u00a0enormous pressure on wages, the next generation questioning\u00a0the efficacy of being a\u00a0wage slave\u00a0and\u00a0challenges around graduates in particular getting on the career ladder\u00a0when minimum wage = a typical graduate salary.\u00a0 Maybe it\u2019s time to rethink how share options should work?\u00a0 Maybe we need to start thinking of them as a more fungible way to get value to employees who can then realise that value through a sensible secondary arrangement? Just a thought.<\/p>\n
Whatever 2026 throws at the cap tables of UK and other nationalities\u2019 businesses we know that getting the value right in a manner that is defensible is going to be more and more important.\u00a0 We spend a lot of time thinking about consistency and quality as well as accuracy and defensibility.\u00a0 And with every report we challenge ourselves to go beyond the mile.<\/p>\n","protected":false},"excerpt":{"rendered":"
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