In other news, one of the oldest pubs in UK has gone on the market.
The Grade II listed barn and pub, The Holly Bush Inn in Little Leigh, Cheshire, dates back to the 17th Century. It came on the market when the owners, husband and wife team Barry and Maureen Lloyd, decided to sell the property which they purchased 20 years ago.
The property is currently being marketed with an asking price of £895,000.
Planning for sale of your hospitality sector business
Regardless of the size of your hospitality business or geographic location, when it comes to selling your business, forward planning is key to a successful outcome.
Throughout each business lifestage, from start up to exit and beyond, it’s essential that business owners partner with the right advisers who can guide them through the various challenges, whilst always seeking opportunities to reduce their tax bill, enhance wealth accumulation and succession planning, and ultimately maximise profitability.
Seeking advice from a specialist who understands the tax implications of a business sale can provide you with a strong advantage when structuring the sale agreement of your business. There are complicated tax laws relating to the buying and selling of a business, but with skilful planning it is possible to minimise or defer some of these taxes.
Here are 5 key points when considering the tax implications of a business sale:
1. Plan ahead. A buyer will go through your business history with a fine toothcomb. Do this yourself and address any possible issues in advance.
2. Ensure CGT Entrepreneurs’ Relief is available on a sale. The rules are straightforward but there are tripwires. Getting this right could mean the difference between paying tax at 28% or 10%.
3. Clean up the balance sheet. Are there assets a purchaser will not want or that you want to keep? Extract these in a planned fashion rather than a last minute panic.
4. Make sure all your Tax Returns (including PAYE and VAT) are up to date. The same goes for Companies House. If there are any outstanding disputes, tax enquiries, etc. try to settle them even if it might cost a bit more. A buyer does not want to purchase problems. If this is not possible, consider how problems might be ring-fenced.
5. Appoint a good team of professional advisers experienced in business sales. They will have come across most situations before and can save you money by negotiating on the structuring of the sale price, especially if there is deferred consideration or an earn out, and minimize your risk of warranty claims following a sale.
In order for businesses to start up on a solid financial footing, survive and thrive business owners must seek opportunities to maximise potential and to put adequate measures in place to protect the health of their business, whilst always planning for the future.
At Beavis Morgan, we have extensive experience of working with clients in the hospitality sector and our professionals are acknowledged experts in issues affecting pubs, bars and restaurants.
We have also acted on a significant number of M&A deals for SME and owner-managed businesses spanning a wide range of sectors, including the hospitality and leisure sector. We too are entrepreneurs and have done deals as principals and as advisers to clients. Our strong corporate finance and advisory offering, as well as our understanding of priorities for all stakeholders in the often challenging sale process, positions us well to assist in both the buying and selling of businesses.
Contact Matthew Burge or your usual Beavis Morgan Partner for further information about how we can assist you and your hospitality business.
Further reading:
Over 5,500 UK restaurants at risk of going under
Rise in business rates set to impact Britain’s pubs