small company valuation procedures info,learning materials

[mbsc]

Hi , I am interested in learning how to evaluate small soletrading,partnership businesses so I could estimate goodwill when the company status change to Limited company. Could you advise me any studing materials internet websites. My friend is now changing the company (plumbing and heating engineering 20 years established as soletrader in privite sector) to limited Company and I think they could recognise goodwill and sell it to their new LTD company?
thanks

 

[Anna Chandley]

This is an area where you really should seek professional advice otherwise your friend could end up paying more tax than necessary.

AS your friend started his sole trader business before 2002, the company would not be able to claim a tax deduction for the purchased goodwill but your friend will pay capital gains on the sale of the goodwill. This assumes that he created all the goodwill himself and did not purchase goodwill from a third party.

 

[mbsc]

Thanks Anna,Could you recommend any literature,books about small company valuation or course ,this is one area I am not limited with and would like to learn more?
thanks

 

[robindunne]

www.accountingweb.co.uk may be a good place to start. It is, however, a site designed for accountants, so unless you have some experience much of it may go over your head.

 

[Anna Chandley]

I would start with the HMRC website. There's some relevant guidance at the link below
http://www.hmrc.gov.uk/svd/index.htm

 

[MyAccountantOnline]

Can I ask are you a member of any accounting bodies? If so some of them offer CPD courses on this topic, again also targeted at accountants some of the training bodies offer CPD courses on valuation methods etc too.