Mid-market business trends: Growth, deals and regulation

• Deal volumes have fallen since the 2021–2022 peak, reflecting higher interest rates and economic uncertainty, but deal values have remained resilient, highlighting a clear shift towards quality over quantity. 
• Regional markets remain attractive, with the Midlands and South West accounting for meaningful shares of UK deal activity, supported by ongoing investor interest outside London. 
• Buyers are increasingly selective, targeting profitable, scalable businesses that can command premium valuations, particularly in sectors such as technology, manufacturing and professional services. 

What this means for your business:
Preparation, performance and sector positioning are now critical to achieving a successful transaction and maximising value. Contact our Corporate Finance specialists to find out how they can support your business growth.

• A typical transaction process takes 3–6 months to prepare and around 6 months to execute, but meaningful value can be unlocked with planning 12 months or more in advance. 
• Exit readiness spans financial, commercial, operational and legal factors from cash flow and working capital to management succession and contract risk. 

What this means for your business:
Organisations that prepare early and tackle risks proactively are more likely to achieve stronger valuations and smoother deals - and with Bishop Fleming’s support, we can help guide you through that transition.

• Tax outcomes on exit can range significantly, from 0% through to as high as 47%, depending on structuring and planning. 
• Early planning can unlock reliefs, defer liabilities and avoid “dry tax charges”, ensuring more value is retained post-transaction. 

What this means for your business:
Tax should be a strategic consideration from day one, not a last-minute exercise to protect the value you’ve created. Discover how our tax specialists can help.

• Many businesses undertake qualifying R&D without recognising it (e.g. process improvement, automation, product development).
• The merged RDEC regime provides a 20% above‑the‑line credit, bringing R&D relief into key financial metrics, enabling it to be used as a key tool in forecasting, and planning investment in R&D.
• R&D tax relief remains a meaningful funding opportunity, with enhanced support of up to 15p for each £1 of qualifying expenditure under RDEC; and 27p in the £1 under ERIS.  There is also improved interaction with grant funding, allowing more effective alignment with wider innovation and financing strategies. 
• New rules on supply chains and overseas costs mean entitlement and claim value depend heavily on contract terms and operating models, creating both risk and opportunity through contract review and structuring decisions. 
• Historic HMRC scrutiny and new compliance requirements (e.g. Notification and Additional Information Form filings) mean that strong governance, documentation, and collaboration between in-house finance and technical teams; and a strong R&D tax relief adviser, is essential to secure, optimise and support successful claims.

What this means for your business:

R&D relief should be built into your business strategy from the outset - not treated as a retrospective claim to support growth and innovation. Speak to Bishop Fleming’s R&D specialists to see how they can add real value to your business.

• All too often borrowers are overloading lenders with inconsistent/irrelevant and poor-quality information, through a lack of understanding of how lenders assess funding opportunities. This is akin to giving them a giant jigsaw puzzle and assuming they have the time and inclination to put it together themselves.
• By far the best way to enhance the probability of a successful funding process is to work with someone who has a deep understanding of a funder’s mindset, process, products and potential outcomes. Essentially, handing the funder a ready-made jigsaw.

What this means for your business:
If you’re thinking of raising debt or equity, reach out to Bishop Fleming, and we can have a no-obligation chat regarding the art of the possible.

• Revised FRS 102 standards (effective from 1 January 2026) require major changes, including bringing all leases onto the balance sheet and a new five-step revenue recognition model. 
• Updated company size thresholds will see many businesses reclassified, with estimates suggesting 113,000 moving to micro-entity status and 14,000 moving from medium to small. 

What this means for your business:
These reporting changes will impact financial metrics, covenants and reporting, requiring early assessment and stakeholder communication. Get clarity with support from our Financial Reporting specialists.

• National Minimum Wage increased from April 2026 to £12.71 for those aged 21 and over, alongside broader employment law changes and mandatory benefit payrolling from 2027. 
• Enhanced EMI limits, including doubling the company-wide cap to £6m and increasing employee limits to 500, provide new opportunities to attract and retain key talent. 

What this means for your business:
Employee incentives and compliance are evolving rapidly, requiring a joined-up approach across HR, finance and tax. Bishop Fleming can support you, ensuring you maximise value for both your business and your people.