Claritas Tax warns that Britain risks becoming a buyer’s market for overseas investors after new ONS figures[1] showed foreign companies spent £25.4 billion acquiring UK businesses between April and June 2026, up £9.7 billion, or 62%, on the previous quarter. Over the same period, UK spending on overseas acquisitions fell from £4.1 billion to £2.7 billion.
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“The UK continues to create excellent businesses, but too many are being forced to compete with one hand tied behind their backs.
“The cumulative impact of higher taxes, employment costs, energy bills and borrowing rates is eroding profitability. This directly affects the ability of businesses to recruit, invest in equipment, pursue acquisitions and build long-term shareholder value.
“As a result, many UK companies are struggling to grow at the same rate as their international competitors. Fundamentally strong British businesses can therefore appear comparatively cheap to overseas investors, allowing them to be acquired before they have realised their full potential.”
“These pressures are particularly evident in the private business market which we hear through conversations with clients about the growing frustration from owners about the direction of UK tax policy.
“Many of the business owners we advise see no clear end to the tax increases and uncertainty being imposed upon them. Some are beginning to ask what they are continuing to take the risks involved in running and growing a business for.
“For those owners, selling is becoming more attractive than reinvesting. They are effectively considering whether to cash in their chips while there is still meaningful value left in the business.
“One quarter of M&A figures does not establish a long-term trend, particularly when several large transactions influenced the overall value. However, the contrast between rising overseas investment in UK companies and falling investment by British businesses abroad should not be dismissed.
“The UK has traditionally been regarded as one of the best European locations from which to establish and grow an international business. Unless we create an environment that enables entrepreneurs to invest and scale with confidence, we risk becoming trapped in a cycle of building outstanding companies only to sell them overseas before their prime.
“If that continues, Britain will lose more than corporate ownership. Investment, intellectual property, future tax revenues and the next generation of entrepreneurs could all move to jurisdictions where business success is more actively encouraged”, concludes Matt Hodgson.
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For further information, contact James Simpson ([email protected]) or Parm Heer ([email protected]) at TMCC Marketing & PR
