When do you need a business assessment
Business assessment – more than simple figures
An assessment of companies does not only concern the figures, it is a question of ensuring that you remain in tax activity, in accordance and in control of your financial future. Whether you sell, plan for the next generation or do in front of an HMRC exam, understanding when and why you need an assessment can avoid unexpected tax bills and missed opportunities. So when exactly is an assessment of companies essential? Let’s take a look.
Sell your business
Are you planning to sell your business? Before doing so, you will have to determine its fair market value of the targets on capital gains (CGT). A precise evaluation guarantees that you only pay real benefit tax and that you can take advantage of tax reductions such as lightening of commercial assets (BADR), potentially reducing your CGT to only 10%. However, it is important to note that BADR rates increased to 14% from April 2025 and 18% from April 2026. The right evaluation could mean thousands of tax savings!
Tax on successions (IHT)
What happens to your business when you left? If you have a business at the time of your death, it is part of your succession and may be subject to a tax on successions. A professional assessment guarantees that the HMRC does not overestimate the value of the company, potentially reducing the tax burden of your heirs. In addition, some commercial assets may be eligible for business relief, which can considerably lower or even eliminate the responsibility of the IHT.
Sharing actions
Are you planning to offer shares to family members? Know that the HMRC considers that it is “eliminating” for tax purposes, which means that an assessment is necessary to determine whether the tax on capital gains applies. However, with meticulous planning, tax succession strategies can generally differ tax responsibilities.
Employee sharing schemes
Offering actions to employees through programs such as business management incentives (issues) or business sharing options (CSOPS) is a fantastic way to motivate your team. But before you start distributing equity, you will need an assessment of companies to determine the fair market value of shares. This guarantees compliance with HMRC and prevents any unexpected tax request for your employees.
HMRC investigations
No one wants to be taken in an HMRC dispute on the value of their business. Whether it is a challenge for your declared tax obligation, an assessment for succession purposes or a disagreement on a sale of companies, having an independent assessment in hand can be the key to defending your position and avoiding unexpected tax invoices.
Mergers, acquisitions and restructuring
Fusion with another company? Restructure your business? Acquire a competitor? An assessment is crucial for tax planning in these situations, because it determines the way in which gains are reported, how good will is treated and if tax reductions apply. The last thing you want is a restructuring plan that leads to unnecessary tax costs.
Do you plan to retire? Before you move away, you will need solid valuation to structure your output in the most efficient fiscal way possible. Whether you sell actions, the transfer of ownership or liquidate assets, a well -timed assessment helps you minimize tax liabilities and maximize your financial return.
Don’t leave that at random
A business assessment is not only a cash exercise, it is a powerful tool that can shape your financial future. Whether you sell, planned for the succession or that you are faced with a challenge to the HMRC, whether you have a precise evaluation guarantees that you remain in tax and legally compliant.
The next steps for the assessment of your business
If you need an assessment or if you have requests in this regard, please contact us. Etc can assure you that you are ready for what comes then, then contact us.
