Company disposals - ensuring your PAYE doesn’t adversely affect the deal
Experience shows that business owners are often unaware of all they need to do to ensure that their business is ready for a proposed sale.
This can sometimes be to an unknown third party rather than an incumbent management team. How the owners present their business to prospective purchasers can have an impact on the purchaser’s appetite to proceed and in some cases, influence the level of the intended purchase price.
Imagine your own views if a business you were looking to acquire had “shabby financial management information, systems and procedures”. Your view would be totally different to one where everything was in order.
The staff resources in a business is one of the key drivers to its success and with this comes PAYE issues, in particular statutory compliance looking at, payroll, pensions, and benefits-in kind relating to employees but more particularly directors.
At a critical time in any sale these reviews can be extremely time-consuming and indeed distressing, and if working with H M Revenue & Customs (HMRC), may invariably involve some additional tax and national insurance payable. Note HMRC have a specialised task force designated to dealing with PAYE enquiries and end of year compliance issues, whether a business is being sold or not.
Solution
Our Tax team offer a service whereby we visit our clients’ business premises and try to identify problem areas and hopefully put procedures in place and rectify in advance of a sale or indeed a visit from HMRC.
We believe the benefits to clients of our undertaking this work are wide ranging and include the following:
- The reduced potential of loss of an intended sale
- The reduced likelihood for a reduction in a purchase price; or
- any HMRC enquiry revealing additional Tax, NIC, Interest and Penalties to be met
In terms of the sale or disposal process we believe our work provides additional benefits including:
- easier due diligence process for any purchaser
- the potential for less extensive & expensive warranties
Costs vary, depending on the time spent and problems discovered. For further details of our work and fee quotations please get in touch with your usual Streets contact or email emanderfield@streetsweb.co.uk
No Advice
The content produced and presented by Streets is for general guidance and informational purposes only. It should not be construed as legal, tax, investment, financial or other advice. Furthermore, it should not be considered a recommendation or an offer to sell, or a solicitation of any offer to buy any securities or other form of financial asset. The information provided by Streets is of a general nature and is not specific for any individual or entity. Appropriate and tailored advice or independent research should be obtained before making any such decisions. Streets does not accept any liability for any loss or damage which is incurred from you acting or not acting as a result of obtaining Streets' visual or audible content.
Information
The content used by Streets has been obtained from or is based on sources that we believe to be accurate and reliable. Although reasonable care has been taken in gathering the necessary information, we cannot guarantee the accuracy or completeness of any information we publish and we accept no liability for any errors or omissions in material. You should always seek specific advice prior to making any investment, legal or tax decisions.
Share this article