Over the course of my career, I must have written hundreds of letters to HMRC Shares and Assets Valuation, Castle Meadow Road, Nottingham. So when the opportunity came to visit said address and meet with some of the SAV team as part of an ESOP Centre visit, I was on the train northwards faster than HMRC withdrew the PTVC service.
Ah yes, the withdrawal of post transaction valuation checks…. it was very much the hot topic of the visit. Last year, HMRC received some 660 PTVC applications. This year, it wont be accepting any. Why? Apparently, because the profession has become “so good” at valuations. So good, that 95% of PTVC applications submitted last year were approved. And with HMRC’s risk-based approach, spending all that time reviewing PTVCs in order to amend only a small handful no longer made sense.
Does this leave tax-payers exposed? The answer is undoubtedly yes, as there will no longer be absolute certainty on valuations applied in transactions where no pre-approval process (such as for EMI and ESS shares) exists. But at least tax-payers sensibly seeking an external valuation from a reputable professional can derive some comfort from the 95% hit-rate of valuations previously submitted under the PTVC.
It was clear that the PTVC isn’t going to be reintroduced any time soon. So moving on, here are 5 other things I learnt during my visit:
- The SAV team comprises 80 valuers. The team deals with 14,000 valuations a year. That’s 175 valuations per valuer per year. Or roughly 1.35 each per working day. (Sorry, maths geek.)
- Most valuers are RICS accredited. Which is reassuring.
- SAV has specialist valuers of horses, football clubs and boats. So the department is not all about unquoted shares.
- Genuinely, there are no fixed guidelines as to appropriate discounts to the valuation of unquoted shares in the context of a) minority holdings or b) impending exits. “Really, really, truly?” we asked. “YES!” we were told.
- SAV’s cost to yield ratio is 1:47.
All in all, an interesting day in Nottingham.
Many thanks to The ESOP Centre and to our hosts in the Shares & Assets Valuations team for making it happen.