Taxes for businessmen buying a company in the UK

People of entrepreneurial spirit that dream of success, that are very creative, energetic and have a lot of innovative ideas shall definitely try their luck in Great Britain.

Acquiring a business in the UK is an excellent opportunity to improve quality of life and realise the most daring business ideas. Instead of wasting time and money on a start-up, you can buy securities (shares) in an existing business or become an owner of an enterprise with established processes, producing premium goods and services.

Tips for buying a company in the UK

To make sure your new business is as profitable and stable as with the previous owners, you should talk to lawyers that are not only competent in tax law and transfer of title or ownership, but are also able to do a thorough marketing analysis of the company’s activities. This will prevent you from making an ill-judged investment and turning an acquisition into a failure.

Experts would be able to evaluate the company’s position in the market, its growth potential in the local environment, crosscheck existing material assets with the recorded ones, check the accounts, legal status and much more. One of the main things is to understand how taxes were paid in the UK and whether there are any debts and liabilities left over to a new owner.

How to buy a business in the UK

There are two ways of acquiring a British company.

1. You buy shares in a business. Owners can still control all the assets while a shareholder, director and beneficial owner are changed. An experienced UK lawyer will help you draft a share purchase agreement and other paperwork for the transfer of title and secure a successful deal.
2. Instead of buying a commercial enterprise, you are acquiring material assets separately — land, equipment, real estate, tools, vehicle fleet, etc. Apart from a sale and purchase agreement you must arrange for a transfer of lease or freehold agreements.

Once the necessary paperwork is completed and the deal is secured, you can move on to the next step — learning how UK taxation works. The system is extremely transparent and beneficial for entrepreneurs; however, it takes time to understand its workings which can be hard on your own.

Taxes for buyers of UK businesses

After the title is transferred and you become a new owner or shareholder, do not forget about the following taxes.

1. Stamp duty on the purchase of immovable property including buildings and land. The amount of stamp duty is proportional to the value of a purchased property.
2. VAT, value added tax, is predominantly payed on taxed property when bought in the UK. Exemption applies to entrepreneurs buying a business as a going concern.
3. Stamp duty on the purchase of shares. Share transfer will cost you 0.5% of the total value if it exceeds £1,000.

UK taxation system functions very well and is normally easy to work with. However, when issues arise, you should discuss it with professionals. Find a tax expert you can trust and secure a safe and profitable start for your business in Great Britain.