黑洞社区

What's the big rush? I think businesspeople across the country have gone slightly nuts over this week's near doubling of capital gains tax (CGT) to 18%. Okay, so these entrepreneurs could end up losing quite a whack selling their businesses after 5 April, but this really isn't the right market to be a seller.

Garvis Snook, the chief executive of regional builder Rok, was fielding two telephone calls a day around Christmas from businesses desperate to sell up ahead of the hike. I have heard of a 64-year-old boss of a small construction business who had planned to retire soon deciding to ditch this idea and get the business off his hands 18 months earlier instead.

Yes, it was bang out of order that Alistair Darling announced the change without consultation in last October's pre-budget report; it was also outrageous that he sparked a panic by giving only six months' notice. But entrepreneurs - if they are indeed the clever business folk that they claim to be - should not have been spooked into cashing in their nest eggs early.

Prices are incredibly depressed. An 8% tax saving is nothing if the value of that business is down 10-20%. A panicked seller is also a sitting duck. Private equity at the lower mid-market level - that is up to about 拢100m - still have cash to spend and they don't have to raise the unfathomable levels of debt that the bigger players bidding for the likes of Alliance Boots and Saga have to secure. Their deals are easier, even now, for banks to fund.

In other words, with so many purchase options available in this great rush to beat the deadline, private equity has put further downward pressure on prices - a fact confirmed to me by a venture capitalist. Businesses have been sold on the cheap. Entrepreneurs might be feeling a little smug that they saved themselves a bit of a tax bill, but they should sit down and have a think: by selling up in 2008 and not gambling that the market would pick up in a year or so, have they cost themselves millions of quid? I think quite a few of their faces will go a shade of beetroot when they answer that question.