Accountancy fees for an asset purchase

[padders]

I am the sole shareholder of 2 companies. My intention is company A purchase the assets of company B for about £15k and then company B is dissolved. This is because the focus of my time has moved to company A, but company B still has some useful assets.

My accountants tell me this is a connected party purchase (which I understand) and will require HMRC approval. They want to charge £1,400 to do work (including an SPA).

This seems expensive to me (10% of cost of assets!).

Any thoughts?

 

[teddys]

It is indeed a connected transaction, but no HMRC aPproval required.

 

[padders]

Hi Teddys,

Thanks. Why is that? Do I need my accounts to do anything? They insist they do - I'm not convinced as to why.

 

[Bob]

(including an SPA

I give in :redface:
What's a SPA :|

 

[padders]

Sale & Purchase Agreement.

 

[teddys]

Hi Teddys,

Thanks. Why is that? Do I need my accounts to do anything? They insist they do - I'm not convinced as to why.

Buying or selling is something between the buyer and the seller: HMRC is no one to approve or disapprove it. What you need to consider is the tax consequence. This is where the accountant's role lies.

 

[NickMoore]

Is A purchasing the assets from B at a fair market price? (i.e. 'arms length' valuation)?
Since £15000 is a relatively small asset purchase I wouldn't sweat it too much or worry about HMRC taking much interest.

Get company B to make up an invoice/deed of sale and present it to company A. Company A pays and takes the assets.

Company B then needs to account for that income in it's accounts. Same as any sale of assets.

Pretty straightforward.