Business sale fell through; what to claim?

[sass.m]

I started the process of buying a business in October 2011, shortly after I was made redundant. It was a complicated process as the sellers were required to reinstate the LTD company status. They were also very slow to provide information through the due diligence process. Despite this, the sale progressed.
I subsequently became self employed in July 2012 and started consultancy work (registered as a sole trader). Throughout this, the sale continued and contracts were negotiated, leases were drafted etc
It then transpired that the sellers hadn't been honest in some of the latter (sales) figures that were provided. I consequently withdrew from the sale in Dec 2012.
I understand that I can claim some of the costs incurred in buying the business, can anyone claim exactly what I can claim please?
Thank you

 

[Talay]

You would normally put certain figures in place at the signing of an exclusive period within which to conduct due diligence and your solicitor should have included fraud and misrepresentation as grounds for costs being payable by the vendor.

 

[sass.m]

Thank you for your comments. The points you made were actually covered in the agreement however before deciding on whether to proceed in making a claim (which will incur more cost & they are a very difficult couple to deal with), I would like to know whether any of the costs incurred to date can be considered a legitimate expense.
Can anyone help with an answer to this, please?

 

[andygambles]

Thank you for your comments. The points you made were actually covered in the agreement however before deciding on whether to proceed in making a claim (which will incur more cost & they are a very difficult couple to deal with), I would like to know whether any of the costs incurred to date can be considered a legitimate expense.
Can anyone help with an answer to this, please?

All depends on your contract. Best person to ask is your solicitor.

 

[sass.m]

Right. The solicitor told me this was an accountancy issue not one for them!!

 

[David Griffiths]

It's going to depend on the detail, but generally expenditure on the acquision of a business is capital, and will not be relievable if the transaction falls through.

Given that you did register as self employed it is possible that some of the costs might be tax deductible, but the question is so general as to make any kind of meaningful answer impossible. If the bulk of the costs are for legal fees, the answer is likely to be not claimable.

 

[andygambles]

Right. The solicitor told me this was an accountancy issue not one for them!!

Lets define claim. Do you mean claim as an expense for tax purposes or do you mean claim from the buyer?

 

[sass.m]

Thanks David (Griffiths). I knew legal fees weren't an allowable expense (in business transfer process) however the query was around equipment, stock, training etc that had been purchased.

AndyGambles - I was referring to a legitimate expense in respect of tax purposes. Apologies if I wasn't clear.

 

[andygambles]

Thanks David (Griffiths). I knew legal fees weren't an allowable expense (in business transfer process) however the query was around equipment, stock, training etc that had been purchased.

AndyGambles - I was referring to a legitimate expense in respect of tax purposes. Apologies if I wasn't clear.

Ah. I suggested solicitor since I though you meant expense you could claim from the sellers due to the sale falling through