Insider Media Limited

The deals market will only come back to the Midlands if the government cuts red tape, stops interfering with business and offers tax incentives. That was the message from three West Midlands professionals at Insider’s recent Deals Debate in Coventry.

Gareth Iley of Clearwater Corporate Finance told an audience of about 80 people: "The government’s policy should centre around making deals and business cheaper and easier to do. The government needs to cut red tape and the tax burden to make the UK a good place to do deals again."

Mark Beardmore, partner at DLA Piper, agreed. He said: "It all comes down to tax. I never understood why taper relief was abolished."

Taper relief was introduced in 1998, but abolished in April 2008 by the then Labour government. It was aimed at reducing amount of any gain chargeable to Capital Gains Tax by as much as 75 per cent. The percentage of the relief available depended on whether the asset was classed as a 'business' or 'non-business' asset and, also, the period of ownership of the asset since 1998 (when the rules were introduced).

Beardmore added: "When it was abolished it held back a lot of people coming to the market. I think the government should be more aggressive when it comes to backing companies looking to do deals."

Simon Ward, investment director at EV Group, thought the government should put it words into action.

He said: "The government needs to stop stifling businesses looking to acquire. It's making the right noises about helping them, but it needs to show action."

He pointed to the introduction of The Enterprise Investment Scheme (EIS), which is designed to help smaller higher-risk trading companies to raise finance by offering tax relief to investors who purchase new shares in those companies.

Ward added: "The EIS scheme will encourage private individuals to get involved with growing companies, but I think the best thing the government can do is get out of the way and let us get on with doing deals again."