Service overview
Tax Due Diligence is a structured review of agreed tax and accounting areas, carried out in connection with a proposed acquisition, disposal, investment or other significant business transaction.
The purpose is to give you a clearer picture of the tax and accounting position of the business being acquired, sold or invested in before you commit to the transaction. The review looks at the records and filings that exist, the tax matters they raise and any points that may need to be reflected in the transaction terms or dealt with after completion.
It is a different exercise from a Business Tax Health Check. A Business Tax Health Check reviews your own business's ongoing tax and accounting position. Tax Due Diligence is undertaken in connection with a proposed transaction, and the scope is set by the transaction rather than by a general review of the business.
We carry out tax due diligence for business buyers, sellers, investors and their advisers, working alongside solicitors and other transaction advisers where a transaction involves several parties. As an AAT Licensed Accountant, we confirm our fee by fixed quotation, so you know the cost before the work begins. VAT is not charged on our fees because we are not VAT registered.
Tax due diligence is not an audit or an assurance engagement, and it is not legal due diligence. It is a review of the tax and accounting information made available, within the scope agreed with you.
Pricing
Our Tax Due Diligence service starts from £1,000. The final fee is confirmed by fixed quotation following an initial discussion about the transaction and the scope of the review, so you know the cost before any work begins. VAT is not charged on our fees because we are not VAT registered.
Who this service is for
- Business owners considering the sale of a company, a trade or a shareholding.
- Buyers evaluating a target company or business before proceeding with an acquisition.
- Investors and management teams assessing the tax and accounting position of a business.
- Companies considering a group purchase, a merger or a significant restructuring.
- Business owners and their advisers who need the tax position reviewed at a specific point in a transaction.
- Solicitors and professional advisers who need tax and accounting input within a transaction timetable.
What we may review
- Corporation Tax
- VAT
- PAYE and payroll
- Accounting records
- Tax returns and computations
- HMRC correspondence
- Outstanding tax liabilities
- Historic filing issues
- Identified tax risks
- Relevant Companies House information
- Transaction-related tax information
What you receive
The output you receive following a tax due diligence review.
Summary of findings
A clear written summary of the tax and accounting position in the areas reviewed, explained in plain English.
Identified tax risks
The tax matters, liabilities and historic filing issues identified during the review, together with how they may affect the transaction.
Points for the transaction advisers
The points that may need to be considered by you, your solicitor or other transaction advisers so they can be reflected in the transaction terms.
Agreed next steps
Our recommendations on what to address before or after completion, with a fixed quotation for any further work.
How it works
Initial discussion and scope
We discuss the transaction, your role in it and the areas you would like reviewed, and we agree the scope in writing before the review begins.
Information review
We review the accounts, tax returns, computations, VAT and payroll records, HMRC correspondence and other information relevant to the agreed scope.
Findings
We work through the position, identify any tax liabilities, risks or historic filing issues and consider how they may affect the transaction.
Report and next steps
We provide our findings and recommendations within the agreed timetable, with a fixed quotation for any further work.
Information we may need
- Accounts, accounting records and bookkeeping information for the periods in scope.
- Corporation Tax returns, computations and supporting schedules.
- VAT returns and VAT records where the business is VAT registered.
- Payroll records, RTI submissions and P11D information where the business employs staff.
- Correspondence with HMRC, including any enquiry or compliance check correspondence.
- Details of any outstanding tax liabilities, time-to-pay arrangements or historic filing issues.
- Companies House filings and confirmation statement information.
- Details of the proposed transaction, including the heads of terms or draft agreement where available.
- Details of the transaction timetable and any completion deadline.
Frequently asked questions
Related services
Scope
The review is performed according to the agreed scope. Complex or highly specialised matters may involve appropriately qualified specialist tax, legal or other professional advisers.
Get a free quote for tax due diligence
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