Autumn Statement 2015: IHT and pension tax relief under scrutiny along with a further increase in HMRC’s powers

“Cuts in reliefs in respect of inheritance tax (IHT), pension contributions and interest on business borrowings could feature high on the Chancellor’s shortlist,” says Tina Riches, national tax partner at Smith & Williamson. She considers the options facing George Osborne in light of the government’s gaping coffers.

Osborne is still under pressure to increase tax revenues, but his hands are tied due to the ‘triple lock’ on the headline income tax, National Insurance and VAT rates – which together account for almost £385bn, that is almost three quarters of all tax receipts of £515bn for 2014/15. 

“So now that a straightforward percentage increase to any of the three main taxes is off-limits, Mr Osborne’s mind needs to focus on enlarging the tax base and other tweaks that will raise revenue. However, continual change causes complexity on top of what is already an opaque and very lengthy tax code,” says Tina Riches, national tax partner at Smith & Williamson, the accountancy and investment management group.

She continues: “The vast majority of people are keen to pay their fair share of tax, but this growth in complexity and difficulty in getting answers from HMRC means it’s easy for people to make mistakes and unwittingly end up with hefty penalties. If our tax system was more transparent, it would be easier for people to get things right!” 

“Owner-managed businesses and our entrepreneurial community often bear the brunt of tax changes as they are typically affected by developments in both personal and business taxes. At the same time, they are unlikely to have the resources that help bigger businesses to cope with tax complexity.”

“With the Autumn Statement coming up, we would benefit from some radical simplification or even a one-in-two-out policy on tax law.”

However, Tina believes this is unlikely and anticipates cuts to some popular tax reliefs, an extension in the tax base and further increases in HMRC’s powers. She provides further details below.

Tax legislation has almost doubled in number of pages over the last five years – despite the work of the Office of Tax Simplification! Smith & Williamson demonstrates in the below photo how the amount and therefore complexity of tax legislation has roughly quadrupled in the last 20 years. 

Clearwater International advises Wax Digital on sale to August Equity LLP

Wax Digital (Wax), the UK’s leading eProcurement solution provider, has completed its sale to August Private Equity. Clearwater International advised the shareholders of Wax Digital on the transaction which sees Nova Capital exit the business.

Wax Digital is an independent Software-as-a-Service (SaaS) business which delivers Source-to-Pay solutions to mid and large-sized organisations around the world. The company provides 245,000 users in 102 countries with a horizontal solution which serves enterprise customers in e-procurement, usually helping customers to maximise savings in indirect spend, and is the only UK vendor to feature in Gartner reports for eSourcing and Purchase-to-Pay (P2P). Wax Digital’s accessible software solutions are deployed via the cloud and managing tens of millions of transactions annually.

Headquartered in Cheshire in the UK, the company works with clients including Universal, Nissan, Virgin Active, BAE Systems and the NHS. The investment from August Equity will boost existing development plans for own-IP products that already compete strongly against the likes of Coupa, Ariba/SAP, Oracle, Ivalua, Verian and others. In a noisy S2P suite market, the fundamental premise by which Wax Digital is starting to carve out a clever niche is based on delivering solutions where absolute functional capability, ERP and other business application integration become inseparable.

Clearwater International advised Wax Digital on the deal. The team was led by partner Carl Houghton, supported by director Emma Rodgers, associate Oliver Wheatley and assistant director Chiara Pettinichio.

Paul Ellis, CEO, Wax Digital, commented:

“We worked with Clearwater International for some time in preparing for the secondary MBO of the business. Having built long-term relationships with the deal leaders, we found their work ethic to be exceptional – the team’s experience added a valuable perspective during negotiations, with high-quality input and clear advice at all key stages of the transaction.

Carl and his team demonstrated a strong understanding of e-procurement and an excellent knowledge of SaaS technology. They delivered an excellent result for all shareholders, working particularly closely with management and the new investors to ensure that there was a strong fit. We enjoyed working with Clearwater International and we look forward to the opportunities that this new investment brings.”

Carl Houghton, Head of TMT, Clearwater International, added:

“Wax has developed incredible SaaS IP without the deep pockets of many of its competitors, and still made 2 Gartner magic quadrants. We are delighted for the team which now has a partner and platform with August Equity that can take the business onto a new level in the UK and internationally. This will build on the fantastic support provided by the exiting Nova Capital, which has now realised a significant return after backing Wax from its early days.”

BridgeU raises $2.5m to make education decision-making intelligent

New EdTech platform eases higher education and careers decisions for schools, universities and students  

London-based education technology startup, BridgeU, has announced a seed round of $2.5m led by Octopus Investments, with participation from Fresco Capital, Seedcamp, and prominent investors including Jonnie Goodwin (Lepe Partners/Founders Forum) and Deborah Quazzo, who plans to contribute her personal investment in BridgeU to GSV Capital’s new EdTech focused fund.

BridgeU has developed the first adaptive university preparation and careers guidance platform for students and secondary schools for use both here in the UK and internationally. A SaaS solution, the platform uses machine learning techniques to recommend to students the best courses and appropriate Universities for them, weighing academic indicators as well as social and vocational preferences. With a suite of cloud-based application strategy, research and builder tools, BridgeU also helps students leverage their unique strengths throughout the applications process, build compelling CVs, and write powerful essays to express themselves and communicate their achievements and aspirations.

With built-in task management, smart notifications and process automation, BridgeU’s platform streamlines the admissions support process for faculty, significantly reducing admin time for teachers and advisors. The platform’s interactive visual analytics dashboards also capture data from each school, providing actionable insight into both local and global admissions trends.

Rebecca Hunt, from Octopus Investments, commented: “Making a decision about which University to attend can be daunting and difficult. BridgeU uses technology in an adaptive, intelligent way to understand and support the needs of each individual student as he or she makes this crucial decision. We, at Octopus Investments, are excited to be backing BridgeU and look forward to working closely with the team over the coming months and years.”

BridgeU will use the new funding to expand its core product to support earlier stage student decision-making, and diversify the range of post-programme offerings to include alternatives to traditional higher education, such as apprenticeships and vocational training opportunities, foundation degrees and online programmes.

“Students are confronted with many more academic and vocational options than ever before. While the diversification of post-secondary opportunity is generally positive, it also results in greater fragmentation, and a more convoluted decision-making process. At BridgeU, we’re offering a solution in Guidance-as-a-Service. We want to equip students and schools with the right technology and data-driven support to ensure that students are making the best decisions for their futures” added BridgeU CEO and co-founder, Lucy Stonehill.

In March 2015, BridgeU was selected as an “All Star” to represent European EdTech at SXSW- Edu, and recently, BridgeU was named one of the top 20 fastest-growing, most innovative EdTech startups in Europe (EdTech Europe).

The Problem:

Educational decisions are frequently made in a vacuum, with either limited information about opportunities or inadequate tools to action such opportunities. To make matters worse, application processes are highly fragmented, admin-heavy and generally opaque. The cost of persisting with flawed decision-making processes and inefficient application systems can be measured in high student dropout rates and reports of student dissatisfaction with their higher education experiences. And yet, the higher education industry is undergoing extraordinary change. More students than ever before are seeking a tertiary education (260 million by 2025). Families are spending more than ever to ensure their children are getting into the best institutions ($100BN by 2017). And the very nature of where and how one pursues higher education opportunities is being disrupted by new technologies, and an ever-growing segment of globally mobile students.

About BridgeU’s founders

Lucy Stonehill and Hywel Carver, met in 2013 after Stonehill returned from a six-week long trip to Asia, where she had demonstrated the concept for a SaaS based University and careers portal at several International schools. After building an early prototype together, Stonehill and Carver received early investment from Seedcamp in the Spring of 2014. Since launching the platform in January 2015 with a UK and an International School product, BridgeU has signed up schools and school groups in 16 countries, with the majority concentrated in either the UK or Asia.