FREQUENTLY ASKED QUESTIONS
Honest answers to the questions owners, solicitors and accountants ask most.
Your accountant’s figure is built for tax, not for what your business is worth to a buyer. An independent valuation requires a different methodology, a different analysis, and independence from any existing relationship with you. A court, a lender or an opposing solicitor is looking for an opinion from someone with no stake in the answer — which, by definition, your own accountant is not. This is not a criticism of accountants; it is a different instruction.
By three approaches that test each other. For a profitable trading business the main method is usually a multiple of the earnings the business can be expected to keep making, taken from the prices paid for comparable businesses and listed companies in the sector and adjusted for the differences: the market approach. A forecast of the cash the business will generate, discounted to a value today, checks that figure: the income approach. The net assets, each restated to current value, set a floor, and become the value where the assets would fetch more sold than kept in the business: the cost approach. Where the approaches disagree, the report says why; they are not averaged. Every adjustment to the accounts, the multiple and any discount is set out with its reason, so the other side can test it.
Fees are fixed and agreed before any work begins. The fee depends on the size and complexity of the business and the purpose of the valuation — not on the value of the business, and never contingent on the outcome. Tell me what you need and I will give you a written scope and a fixed fee, normally within 48 hours.
Most valuations are completed within about a week — once I have the information I need. Timing depends mainly on how quickly the financial statements and answers come back; once everything is in hand, turnaround is fast. Urgent matters can be prioritised where there is a court or filing deadline.
My valuations are prepared to the evidentiary standards expected by HMRC, the courts and lenders. A valuation carries weight because of the rigour of the methodology, the transparency of the assumptions and the independence of the valuer — not simply because of who produced it. Where a report is prepared for proceedings it is structured to the rules that govern expert evidence in those proceedings — CPR Part 35 and PD 35 in civil claims, FPR Part 25 and PD25B in family proceedings — including the expert’s declaration and statement of truth.
Yes, that is a core service. A fixed-fee desk review sets out what the served report does, where it is vulnerable, and whether the vulnerabilities are material enough to be worth pursuing. If the report is sound, the memo will say so. That is a useful answer too, because it stops your client spending money on an argument that will not run. A review does not produce a figure of its own: if you need one, that is a valuation, scoped and quoted as one. A full rebuttal report follows only if the desk review justifies one.
I act in matters in England and Wales. Scotland and Northern Ireland have separate court rules and different terminology for these proceedings, and I do not hold myself out as covering them. Valuation methodology under the International Valuation Standards (IVS) does not change at a border, but the procedural requirements for expert evidence do, and a report written to the wrong rules is worth less than no report at all. If your matter sits outside England and Wales, tell me at the outset and I will say straight away whether I can help.
I act as a party-appointed adviser. I am instructed by one party and my work is prepared for that party. I do not hold myself out as available for single joint expert appointment. Party-appointed does not mean partisan: my duty is to the accuracy of the analysis, and where a report is filed my overriding duty is to the court.
A small or loss-making business often needs an independent valuation most of all. In a financial remedy case, a partner dispute or an HMRC matter, you need a defensible, independent figure even when that figure is modest or rests on net asset value rather than earnings.
I use modern tools to do the heavy lifting faster — but the opinion, the judgement and the signature are mine. You are not paying for a printout anyone can generate in seconds; you are paying for a defensible opinion someone will stand behind when it is challenged. The tools make me faster and keep the fee fixed; they do not make the call.
The signed accounts for the last three to five years, and the documents that decide what the shares are worth. Usually: recent management accounts; the articles of association and any shareholders’ agreement; the main leases and contracts; a breakdown of sales by major customer; any forecast; and details of any offer for the business, any current or threatened litigation, and any final-salary pension scheme. Tell me the purpose of the valuation too, because it decides the definition of value and the date. I send a structured information request after our first conversation so you know exactly what is needed and why each item matters.
Not on their own. Property, plant and machinery, pensions and intellectual property are separate valuation disciplines, with their own qualifications and standards. Where a business owns its premises or depends on specialist plant, I value the business and, with your agreement, rely on a specialist such as a RICS Registered Valuer for that asset, and the report says so. I hold no referral arrangement with anyone, so when I say a matter needs another specialist, that is a technical opinion, not a commercial one.
A single joint expert is instructed by both parties together and produces one report both sides rely on. A party-appointed expert is instructed by one party. In family proceedings the court’s normal expectation is a single joint expert under PD25D, and permission under FPR Part 25 is required either way. In civil claims a party-appointed expert is more usual, and a party-appointed expert is also the ordinary route where an existing report is being tested. In both cases, where the report is filed, the expert’s overriding duty is to the court and not to the party paying. I act as a party-appointed adviser. I do not hold myself out as available for single joint expert appointment.
Yes, as a party-appointed adviser or as a reviewer of a report already produced. The valuation questions in a section 994 petition are usually three: which date the shares are valued at, which basis of value applies, and whether a minority discount is applied at all. In a company the court treats as a quasi-partnership, a pro-rata valuation with no minority discount is commonly the starting point, and an expert who has applied a discount without addressing that is exposed. The court decides those questions; my job is to set out the valuation consequence of each answer. Where the quasi-partnership question is in issue, I value the shares on both footings, with and without the discount, and say which one the instruction asked me to treat as primary.
The purpose fixes the date; I do not choose it to suit an outcome. In financial remedy proceedings the date is normally as close to the hearing as is practicable. In a section 994 petition it is commonly the date of the order for purchase, though the court has a discretion and may fix another date. For HMRC purposes it is the date of the disposal or the chargeable event, which on a death is the date of death. Information that came to light after the valuation date is generally excluded unless it evidences something that was known or knowable at the date. Where the date is genuinely in issue, I will say so and, where it is useful, value at more than one date rather than pick one quietly.
Basis of value is the definition of value the report is answering to. The International Valuation Standards define several, and recognise others set by a statute or the courts; they produce different numbers from the same facts. Market Value assumes a willing buyer and a willing seller at arm’s length. Equitable value is the price that is fair between two identified parties, such as two partners settling a buy-out. Investment value is what the business is worth to one particular party, which is not a market number at all. Fair value, as the court applies it to a quasi-partnership in an unfair prejudice petition, commonly means a pro-rata share of the whole with no discount for the size of the holding. A report that does not state which basis it used, and where the definition comes from, has an error at the top that everything below inherits. It is the most common defect I find on review.
By the statute, not by the accounts. For capital gains tax the value is the price the shares might reasonably be expected to fetch on a sale in the open market (Taxation of Chargeable Gains Act 1992, section 272), and inheritance tax uses the same test (Inheritance Tax Act 1984, section 160). The buyer is assumed to have all the information a prudent purchaser of that holding would reasonably require, and to hold the shares subject to the articles, so pre-emption rights and transfer restrictions are reflected in the value rather than ignored. How much information a buyer could expect depends on the size of the holding, which is one reason a small minority and a controlling stake are valued so differently. For inheritance tax, shares in the same company held by a spouse or civil partner can be valued together with the holding. A report for HMRC names that statutory basis, reasons each discount from the holding and the articles, and shows its workings. HMRC can enquire into any valuation; what the report can do is answer the questions it will ask. For capital gains tax, HMRC will also check a valuation after the disposal if asked, on form CG34, before the Self Assessment filing deadline.
Before I read anything substantive, I need the name of the company, the parties on both sides and the firms acting. Those go against current and past instructions. If there is a conflict I say so immediately and return the papers unread. If there is a connection that falls short of a conflict, I disclose it in writing and you decide. The check takes minutes and it happens before the fee conversation, not after.
No, in either direction. I do not pay for introductions and I do not accept a commission for making one. Where a matter needs a discipline I do not cover, I say so and I do not earn from where it goes next. Fees are fixed, agreed in writing before work begins, and never contingent on the outcome or expressed as a percentage of value.
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