On purchasing a business, the new owner will typically inherit the exposure to any historical tax risks which will remain the liability of the newly acquired target.
It’s therefore necessary to carry out a tax due diligence exercise to get an understanding of the target business’s tax profile.
This will typically involve:
- A detailed examination of a business’s compliance with its historical tax filing and payment obligations,
- Obtaining details of any ongoing HMRC audits or enquiries,
- Identifying any additional tax exposures, and
- Evaluating the ongoing availability of any tax attributes after the transaction has taken place.
Tailored approach
We provide comprehensive tax due diligence services encompassing corporate tax, employment tax and VAT. We can tailor our scope to fit your needs.
For example, whereas an extensive due diligence process might cover the four previous accounting periods, for more straightforward acquisitions the scope may be reduced to cover only those periods that are still within the normal time limits for HMRC to open an enquiry.
Our services
We can provide expertise in the following areas:
- Identification of key tax exposures that haven’t previously been recognised which may give rise to a reduction in the purchase price.
- Provide recommendations on areas for improvement in the management of the tax affairs that should be examined post-completion.
- Evaluate issues arising from any pre-transaction reorganisations that have taken place.
- Provide tax planning advice to help preserve the availability of target tax attributes such as unutilised trading losses.
- Input into the drafting of appropriate warranties and indemnities to ensure that the purchaser has adequate contractual protection for any issues that have been identified.
How we can help
We have vast experience advising businesses across a range of sectors and our team have the expertise to provide pragmatic and tailored advice to meet your objectives. You can find out more about the deals we’ve worked on.
In a recent transaction we supported a Belgium-based business with tax due diligence services in an acquisition to bolster their UK presence. “Saffery provided excellent advice and guidance throughout the entire tax due diligence process, wherever needed, avoiding discussions or delays.”
