Connected workstreams · Clear adviser responsibilities
Financial and tax due diligence. Clear workstreams for your deal.
Connect the earnings and cash review with the specialist tax questions your transaction needs answered.
Consult EFC leads the agreed financial analysis and helps coordinate the interfaces with your tax and legal advisers. We define who reviews each area, what the evidence shows and which matters need resolving before the next transaction decision.
Kishen Patel ACA
ICAEW Chartered Accountant
Big Four audit and investment banking background
Start with the decision
Connect the finding to the right workstream
Financial and tax due diligence are related but distinct workstreams. Financial review examines performance, cash and transaction balances. Specialist tax review assesses the tax matters agreed for the entities, periods and proposed structure. Responsibilities and reliance should be explicit at the outset.
Financial analysis
What does the information say about performance and cash?
- Earnings quality and accounting judgements
- Cash, working capital and debt classification
- Historical and forecast reconciliations
Specialist tax review
Which tax positions need specialist assessment?
- Returns, computations and payment records
- Relevant correspondence and open enquiries
- Transaction structure and specific tax questions
Legal coordination
How should the transaction team address the findings?
- Share the agreed financial and tax questions
- Identify evidence still needed before signing
- Solicitor-led assessment of contractual protections
Scope shaped around your situation
Investigate the interfaces, not just the headings
Corporation tax information
Organise computations, returns, payment records and relevant correspondence for the appointed specialist. Accounting profit and taxable profit are not interchangeable.
VAT and transaction structure
Identify the relevant entities, registrations, supplies and proposed share or asset structure. Specialist advice is needed for the applicable treatment.
Employment and payroll
Bring together payroll records, contractor arrangements and supporting policies for agreed review. Tax status questions depend on the actual working arrangements.
Claims and reliefs
Identify material claims, supporting evidence and open questions. Prior acceptance or a repayment should not be assumed to settle every future review issue.
Financial statement interfaces
Reconcile relevant tax balances, provisions and cash payments to the records. Agree which items are working capital, debt-like or separately adjusted in the deal.
Actions and responsibility
Record the finding, evidence, adviser owner and next decision. Keep financial analysis, tax conclusions and legal drafting responsibilities distinct.
For the decision in front of you
Follow the finding across the adviser team
Financial question
A material tax balance appears in the accounts. Reconcile it to the ledger, payments and available schedules, and identify what remains unexplained.
Specialist tax question
The appointed tax adviser assesses the tax position, open enquiries and any transaction-specific implications within their agreed scope.
Transaction question
The financial, tax and legal advisers coordinate the agreed treatment in the price bridge and contract. Record the owner, evidence and action so the issue is not counted twice or left unresolved.
For a purchase, begin with the buyer financial review ↗. For a sale, begin with seller financial preparation ↗. Specialist tax opinions, structuring and legal advice require the appropriate adviser and an expressly agreed engagement.
Clear outputs. Defined responsibilities.
What you can expect to receive
The engagement letter sets the final deliverables, intended use, recipients and limitations. Your proposal should make those outputs easy to compare.
An agreed workstream map
The entities, periods, questions, specialists, deliverables and intended recipients.
A coordinated issues register
Financial findings, tax questions, evidence gaps, responsible advisers and priority actions.
A financial findings discussion
The agreed financial output and a coordinated discussion of matters requiring tax or legal assessment.
A practical working process
From the first question to the next decision
Understand the structure
Confirm the proposed transaction, jurisdictions, entities, adviser team and deadlines.
Allocate responsibilities
Agree our financial scope and identify the tax specialist and solicitor responsibilities before work starts.
Review and connect
Analyse the agreed financial evidence and coordinate relevant questions and records across workstreams.
Prioritise the next actions
Explain financial findings and track specialist questions, limitations and decisions still outstanding.
Timing and fees are agreed after scoping. Data quality, access, the number of entities and the decision deadline all affect the work required. We raise material scope changes rather than assuming every extra request is included.
Agree the brief before work begins
Clear about the work. Clear about its limits.
Specialist tax due diligence, tax opinions, transaction structuring and legal advice are included only under an expressly agreed specialist engagement. We confirm whether work is delivered by your existing advisers or another appointed specialist before acceptance. No tax clearance, legal protection or complete identification of liabilities is guaranteed.
Relevant HMRC guidance includes VAT on transfers of a business as a going concern and employment status for tax. These illustrate specialist questions, not automatic conclusions about your transaction.
Your questions, answered
Financial and Tax Due Diligence UK: common questions
Are financial and tax due diligence the same service?
No. They are distinct workstreams with important interfaces. The engagement should identify the questions, responsible adviser, deliverables, limitations and reliance for each.
Who performs the specialist tax work?
This must be confirmed before acceptance. The specialist may be your existing tax adviser or another appointed provider under a separately agreed scope. A general financial engagement should not be assumed to include tax opinions or clearance.
Can you work alongside our existing tax adviser and solicitor?
Yes, with agreed responsibilities, access and communications. We can coordinate the financial information and issues relevant to their work while each adviser remains responsible for their own scope and conclusions.
Does an asset purchase eliminate tax and legal risks?
No blanket assumption is appropriate. The liabilities, obligations and taxes relevant to an asset or share transaction depend on the facts, structure and applicable rules. Obtain transaction-specific tax and legal advice.
Will you review every tax and every jurisdiction?
Only the explicitly agreed specialist scope. The relevant taxes, periods, entities, jurisdictions, materiality and procedures must be identified. Cross-border and specialist areas may require additional advisers.
Can tax findings change the purchase-price bridge?
Potentially, depending on the item and the negotiated definitions. Financial, tax and legal advisers should coordinate classification and avoid inconsistent or duplicate treatment in cash, debt, working capital or separate adjustments.
Is this a guarantee that HMRC will not challenge the business?
No. Due diligence is not a tax clearance or guarantee against a future enquiry. Conclusions depend on scope, evidence and the applicable rules.
What should we provide first?
Describe the proposed transaction structure, entities, countries involved, stage, timeline and current adviser team. We can then discuss the financial scope and the specialist tax work required.
Let’s define the next step
Tell us what you need to understand
Start with your situation and decision deadline. Please leave confidential documents out of the form; we can agree appropriate information sharing after the initial discussion.
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