The route
How to buy a business in the UK: the steps and what each costs
Updated
Buying a UK business runs the same way whatever the size: a brief, a target, an offer, due diligence, a sale agreement and completion, with stamp duty on a share purchase paid within 30 days.
The steps, in order
1. Write the brief
Sector, area, price range, and whether you would buy the company's shares or its business and assets. Every broker and adviser asks for these first.
2. Agree heads of terms
A non-binding offer sets the price, the structure and the exclusivity period before either side spends money on lawyers.
3. Due diligence and the legal work
The published starting fees we read run from £500 for a fixed legal service to £5,000 plus VAT for a solicitor to run the transaction, and £15,000 as the minimum buy-side adviser retainer.
Source: UK Business Purchase Cost Index
4. Share purchase or asset purchase
Buying shares through a stock transfer form carries stamp duty at 0.5% on the price, rounded up to the nearest £5, paid within 30 days of the form being signed.
Source: GOV.UK: Tax when you buy shares
5. Property and VAT
In an asset purchase, land and buildings carry Stamp Duty Land Tax in England, and a transfer that meets HMRC's going concern conditions is outside the scope of VAT.
Source: HMRC VAT Notice 700/9: transfer a business as a going concern