An independent share valuation is always a key step in the design and implementation of an employee share scheme for an unquoted company. Tax or fiscal valuations in the UK are subject to special rules which have evolved over time out of a combination of case law and legislation. Whether a valuation is acceptable for tax purposes is ultimately a matter for HMRC. There is a specialist department within HMRC known as Shares & Assets Valuation Office which reviews and agrees share valuations for the tax-advantaged employee share schemes, previously known as tax-approved schemes. It is important to recognise that HMRC has withdrawn its facility for Post-Transaction Valuation Checks and PAYE Health Checks for valuation. The requirement is, therefore, to consult with an expert share valuation consultant for purposes of performing the valuation in order to ensure that it is credible and capable of a robust defence if subsequently challenged by HMRC.
David Craddock is one of those rare practitioners who is both an expert employee share schemes consultant and an expert share valuation consultant. It is this dual specialism combined with an acute knowledge of the techniques that underpin share and company reconstructions as well as trust structures that enables him to find solutions that would otherwise be elusive. This page focuses on David’s expertise in share valuation.
David is the Technical Secretary of the Worked Examples Group on Share Valuation, the small group of practitioners who meet on a quarterly basis with a representative from HMRC Shares & Assets Valuation Office to develop and examine examples of where share valuation techniques, principles and precedents apply in specific employee share scheme situations. The finalised and agreed versions of the worked examples are then displayed on a website that is organised by The ESOP Centre.
David has also written on share valuation matters in his book Tolley’s Guide to Employee Share Schemes and in various publications including the highly respected Chartam Magazine. Additionally, he has lectured on the subject of share valuation to local groups of the ICAEW and other groups of accountants and tax practitioners on courses organised by Professional Training Partnership and Mercia Group.
‘Respected for his ability to find solutions in testing cases, David offers his share valuation services for a single standalone share valuation or for application to an employee share scheme or a management buyout or share or company reconstruction.’
Why You Need David as the Quality Choice for Your Share Valuation Assignment
In March, 2016, HMRC withdrew its service on Post-Valuation Transaction Checks and PAYE Health Checks, leaving a high level of uncertainty in the market on the values that are attached to the transactions. Furthermore, HMRC has the right to pick out at random any case for detailed scrutiny and challenge. In this testing environment, you need a quality share valuation that can develop a result that is capable of withstanding robust attack by HMRC.
Whole Company Valuation
Minority Interest Valuation
Employee Share Scheme Valuations
Value Impairment Assessments
Value Shifting Assessments
Portfolio Stock Valuations
Stock-Based Remuneration/Compensation Assessments
Intangible Asset and Intellectual Property Valuations
David Craddock Consultancy Services offers the following services:
To undertake an independent valuation
To negotiate and agree a valuation with HMRC
To advise on the valuation implications of different potential employee share schemes
To advise Boards of Directors on current company value positions
To determine share valuations for internal trading through an employee share trust
To establish value positions that can be frozen into particular classes of shares
Testimonials of David Craddock’s work on Share Valuations for Employee Share Schemes
“Thank you for guiding my company over the years in annual valuations for purposes of trading with the employee share trust that we established for the delivery to our employee share scheme participants.”
“As a practising solicitor, I have been pleased to draw upon David’s specialist valuation skills that are evidenced in his reports that are very readable and understandable to a layman and yet addresses with great competence the technical issues of the case.”
“David always starts his cases with me by listening to all the facts of the case and determining precisely the objectives. He then produces the answer based on a thorough knowledge of the valuation methodologies.”
“I was amazed at the solution that David produced that received a clearance from HMRC when I had almost given up on ever finding a way out of the mess that I was in. With laser-like accuracy, David focused in on the elements that he needed for the defence.”
Chartam Magazine for Chartered Accounts – Winter Edition 2018 – The Share Valuation Implications for Employee Share Scheme
Share scheme valuation is a critical part of designing an employee share scheme for some businesses. In the UK tax valuations are subject to specific rules and whether a share scheme valuation is suitable for tax purposes is decided by the Shares and Assets Valuation department of HMRC.