Corporate tax services
Buying, selling and restructuring companies; mergers and demergers; streamlining company portfolios; setting up holding companies: it all requires first-rate tax advice to ensure you are aware of any potential pitfalls and benefit fully from all the corporate tax advantages available to you.
Buying and selling companies (reviewing tax warranties and covenants, etc.)
When buying or selling a company, it is essential to have an expert review of any tax warranties and covenants. This is to ensure that no unpleasant surprises emerge further down the road.
When a company is sold, the purchaser inherits any tax issues which may arise later. For example, if HMRC become aware that VAT or PAYE has been underpaid, the company will be liable to correct the position.
Buyers and sellers will have differing priorities and objectives. Whichever side you are on in the transaction, it is key to take advice to protect your tax position.
It is crucial to ensure that you have expert corporate tax advice in place. Most lawyers will specifically exclude tax in their letter of engagement.
A warranty is a statement of fact about the tax affairs of the target company. There will also be a disclosure letter which sets out any exceptions to the warranties which have been made. It is made by the seller in the SPA (share purchase agreement) and is usually documented in a schedule (or appendix) to the main SPA.
A tax covenant is a promise to pay an amount if certain circumstances arise. An indemnity is an agreement made by the seller to recompense the purchaser if a future liability arises from a specified issue.
Valuations
There are many occasions when a business owner might need a valuation of their business. We frequently become involved when they wish to award shares to an employee and need to understand the tax liability this will involve.
We have a great deal of in-house expertise in this area, applying different valuation methods (depending on the type of company) to reach a reasonable valuation range.
As well as relating to employee share schemes, valuations are often required for the repurchase of shares by a company, for group reconstructions and for Capital Gains Tax purposes on death of a shareholder. We can assist in each of these circumstances.
We use a variety of methods of valuation, with the most appropriate depending on the type of business. Start-ups and loss-making businesses are valued in a very different way to long-term profitable companies, and the sector in which your business operates also has an impact.
Our pricing depends on the type, size and complexity of your business. We work on a fixed fee basis and once we have learned about your business and requirements, you will receive a fixed fee quote.
This will depend on their experience and expertise in the field of valuations, as well as their tax expertise.
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To find out how we can help with your requirements, please send a free enquiry.
