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TWP reminds business owners of tax obligations when planning exit strategies

Surrey-based accountancy firm TWP has urged business owners to consider the tax implications they may face when looking to sell their company.

Recent research has indicated that 65 per cent of business owners who run companies with a turnover of more than £5 million are pursuing an exit strategy, while nearly a quarter of these business owners looking to sell or wind down their business within the next 12 months.

“We understand that there are many factors at play for business owners wanting a way out,” said Emma Croft, Private Client Tax Manager at TWP. “However, the recent trend of business owners fast-tracking their exit strategies could see hasty decisions that lead to mistakes – particularly when it comes to tax obligations.

“Business owners need to keep in mind the numerous tax considerations when planning their exit strategies. These include Capital Gains Tax, Corporation Tax, and Business Asset Disposal Relief.”

With exit plans at the forefront of a large proportion of business owners’ minds, these tax warnings could see many face penalties for non-compliance. Emma Croft explained: “Failure to comply with the tax obligations associated with your business exit strategy can lead to significant penalties.

“For example, if you are rushing through the sale of your business and then miscalculate your Capital Gains Tax, you could be subject to 100 per cent of any potential lost revenue.

“We would advise any business owner considering or implementing an exit strategy to take their time and take stock of their tax obligations before rushing into anything and making mistakes.”

TWP has an expert team with years of experience in tax matters and is ready to advise you on any questions you may have regarding tax implications concerning your business strategy. To find out more, please contact us today.