HW FISHER LLP

Our work involved reviewing the corporation tax, VAT and payroll compliance and reporting to the US purchaser in respect of any compliance breaches or errors. Additionally, we reviewed the tax warranties and indemnities in the Sale and Purchase Agreement to ensure that the purchaser obtained sufficient financial protection against the risk areas we identified in our due diligence report.

One key risk area identified was in relation to employment taxes and the operation of the Covid-19 Job Retention Scheme. We reviewed the calculation of the claims under the Scheme and highlighted areas of risk, particularly considering the announcement that HMRC would be reviewing such claims due to their suspicion that substantial levels of fraud have taken place.

We undertook the due diligence review to a very strict timetable and met the deadlines that were imposed. We also explained our findings to the purchaser’s US tax advisors so that they could consider any US tax implications.