Tax due diligence

What is tax due diligence?

Tax due diligence is the process of evaluating the tax risks and opportunities associated with a potential transaction. It involves a detailed review of the target company's tax history, compliance, and potential exposures, such as unpaid taxes, undisclosed liabilities, or tax planning strategies that could trigger a tax audit or penalty.

While relying on warranties and indemnities may provide a purchaser with a mechanism to recover unprovided tax liabilities, this process will undoubtedly be costly and take time.

By identifying any risks early on, you can negotiate better terms, allocate risks, and plan for post-transaction integration.

We can review the target’s tax position in relation to:

• Corporation tax
• Share and Share Option Schemes
• Employment Related Securities
• Employment taxes
• VAT
• R&D Tax Credits
• Historical group reorganisations
• Transfer Pricing and intra group transactions
• Tax exposures from historical tax planning arrangements

Our tax due diligence service

Our team of experienced tax professionals can provide you with a customised due diligence plan that suits your specific needs and objectives. We can help you:

• Identify tax exposures and contingencies
• Evaluate tax compliance and reporting
• Assess tax strategies and planning opportunities
• Analyse tax implications of the transaction structure and any pre-transaction restructuring by the target
• Provide tax opinions and recommendations

Our approach

Our approach to tax due diligence is collaborative and transparent. We work closely with our financial due diligence team as well as your legal and financial advisors to understand your transaction goals and risk tolerance. We deliver our findings in a clear, concise, and actionable Red/Amber/Green (‘RAG') style report that highlights key issues and provides recommendations to deal with the tax risks identified.

Get in touch

If you want to minimize tax risks and maximize deal value, contact us to learn more about our Tax Due Diligence Service. We offer a free consultation to discuss your needs and provide you with a customised quote. Let us help you make informed decisions and achieve your business objectives.