Buying or selling a business? What financial and tax due diligence involves

Whether you are buying a business, selling one, or raising investment, due diligence is the stage where the numbers are independently verified. Deals rarely collapse over price — they collapse over surprises. FDD and TDD exist to eliminate them.

Financial due diligence (FDD)

• Quality of earnings — are the profits real, sustainable and repeatable?
• Working capital — what the business actually needs to run day to day
• Debt and debt-like items — the liabilities that reduce the price pound-for-pound
• Cash flow — profit is opinion; cash is fact

Tax due diligence (TDD)

• Corporation Tax, VAT and PAYE compliance history
• Open HMRC enquiries, disputes or unsettled positions
• Exposure from aggressive historic positions or misclassified workers
• Transaction structuring — share sale vs asset sale, and the tax consequences of each

Selling? Vendor due diligence pays for itself

Sellers increasingly commission their own due diligence before going to market. It finds and fixes issues on your timetable rather than the buyer’s, supports your asking price with evidence, and typically shortens the deal timetable — reducing the risk of price chips late in negotiation.

How we work on transactions

We carry out proportionate FDD and TDD for owner-managed deals — the scale of diligence a £1–10 million transaction actually needs, without Big Four pricing. Fixed fees, plain-English reports, and practical advice on what the findings mean for price and structure.