With the recent changes in tax, many principals may be reconsidering the option to incorporate, and as an organisation, we always strongly advise talking to a specialist dental accountant before making such a decision.
As agents, we have, over the years, carried out hundreds of incorporation valuations, and when undertaking such a valuation, we always provide our methodologies to HMRC and are able to evidence our valuations with comparables and market knowledge. Not everyone is aware that HMRC are able to investigate an incorporation valuation for up to six years, and recently, one of our clients who had an incorporation valuation in November 2009 had such an investigation. HMRC challenged the value we attributed, which was just under £1.5 million, and wanted to reduce the value by £600,000. However, following a review of this and by using evidence and the full support of Frank Taylor & Associates, they agreed to retain the original valuation figure. This was a tense and frustrating time for the dentist involved, and the relief was that after all of these years, we were able to support and provide a solution to the challenge with our robust evidence.
If you are considering incorporating, our advice remains the same: seek advice from a dental specialist accountant and make sure you fully incorporate, which means, amongst other areas, updating the website, new contracts for employees and self-employed colleagues, registering the new legal entity with CQC, and ensuring your creditors have also been informed.
We provide the same level of care to all our valuations and pride ourselves on being able to support our evaluations with comparables, so much so that when an independent chartered surveyor is instructed to carry out a valuation to support a bank loan application, we have a success rate of at least 94%, and discrepancies tend to be linked to freehold values, which are out of our jurisdiction.
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