Ӱ

Due diligence


Produced by a Tolley Corporation Tax expert
Corporation Tax
Guidance

Due diligence


Produced by a Tolley Corporation Tax expert
Corporation Tax
Guidance
imgtext

Introduction to due diligence

A tax practitioner is most likely to become involved in a financial due diligence exercise by reviewing the target’s current and historical tax position on behalf of the purchaser of a company or group of companies.

The overall aim is to provide a report to the management team highlighting key areas of risk, quantifying the potential exposure and suggesting what actions could be taken by management to mitigate these risks. This process is also often required by the banks and other finance providers involved in the transaction to give some comfort that the investment being made is sound, prior to funds being advanced to the acquiring group. As part of the wider due diligence process, detailed checks may also be made concerning the legal and commercial history of the target, depending upon the requirements of the purchaser.

The financial due diligence report usually covers:

  1. •

    analysis of the financial position

  2. •

    analysis of the forecast results

  3. •

    details of the customer base, value and terms of key contracts

  4. •

    details of the management team

  5. •

    review

Access this article and thousands of others like it
free for 7 days with a trial of Tolley+™ Guidance.

TAKE A FREE TRIAL
Powered by
  • 10 Nov 2023 08:34

Home/ Tolley Tax Guidance/ Corporation Tax / Funding and expanding the business

Popular Articles

Owner-Managed Businesses

Residential property and capital allowances

Residential property and capital allowancesResidential property ― plant and machinery allowancesOrdinary residential property does not, and never has, qualified for capital allowances. as CAA 2001, s 35 denies plant allowances for expenditure incurred in providing plant or machinery for use in a

14 Jul 2020 17:14 | Produced by Tolley in association with Martin Wilson and Steven Bone Read more Read more
Personal Tax

Losses on shares set against income

Losses on shares set against incomeUsually, allowable capital losses can only be set against chargeable gains. If the losses are not fully utilised against gains in the year in which they arise, the excess is carried forward to use against future gains. See the Use of capital losses guidance note

14 Jul 2020 12:12 | Produced by Tolley Read more Read more
Employment Tax

Payroll record keeping

Payroll record keepingUnder SI 2003/2682, reg 97, “...an employer must keep, for not less than 3 years after the end of the tax year to which they relate, all PAYE records which are not required to be sent to [HMRC]...”. Reasons for keeping the records include:•being able to calculate tax and

14 Jul 2020 12:52 | Produced by Tolley in association with Vince Ashall Read more Read more