Tax Liability Insurance
Tax liability insurance, sometimes referred to as tax insurance, helps businesses, buyers, sellers and investors manage identified tax risks with greater certainty. It can be particularly valuable in mergers and acquisitions, where a historic, planned or technical tax position may be questioned by HMRC, a due diligence provider or another tax authority.
Who we support
- Business owners
- Private equity (buy-side and sell-side)
- Family offices
- Corporate finance advisers
- Trade and buy-and-build acquirers
- Real estate investors and funds
- Liquidators and insolvency practitioners
We're specialists...
Through our collective experience, we’ve observed many of the best and worst practices in the insurance advisory market. We’re here to challenge the status quo and aim to establish a new level of service. We’re combining the best traditions of technical advice and client centricity, with modern thinking and smart use of systems and technology to enhance the client experience and create a dynamic workplace for our team.
We’re specialists in Tax Liability Insurance
Partners& provides specialist tax liability insurance advice for UK businesses, with a clear focus on M&A transactions, business restructuring and well-governed companies looking for certainty around a specific tax position. We help clients understand how a potential tax exposure could be insured, how insurers are likely to view the risk and what information is needed to support a successful placement.
How we support
We work with clients and their advisers to assess the tax position, understand the potential quantum and identify the information insurers will need. From the outset, we provide clear guidance on process, appetite, likely costs and timescales, helping tax liability insurance become part of the wider transaction or risk management strategy rather than an afterthought.
Your business performs
Even where a business has taken specialist tax advice and acted in good faith, grey areas of tax interpretation can create uncertainty. A challenge to a tax position can lead to a balance sheet provision, a specific indemnity request, a delay in negotiations or pressure on price. Tax liability insurance can help neutralise that risk by transferring the potential liability to an insurer.
What is tax liability insurance?
Tax liability insurance is designed to transfer a known but uncertain tax exposure from a company’s balance sheet to an insurer. It can respond if HMRC or another tax authority successfully challenges the insured tax position, helping to cover the potential tax liability, defence or contest costs, interest and any applicable penalties where insurable.
Tax insurance is often used where there is uncertainty around the interpretation of tax rules, the treatment of a historic or planned transaction, or a tax issue identified during due diligence. In an M&A context, this can help avoid the need for a specific indemnity, reduce pressure on deal value and give both buyer and seller a clearer route to completion.
Cover can be arranged for a range of tax matters, including historic tax positions, restructuring, tax treatment of transactions, indirect tax issues, transfer pricing, withholding tax, tax residency, tax reliefs, exemptions and other identified exposures. Tax liability insurance can also be arranged to cover advance tax payments in appropriate circumstances.
Tax insurance is not designed to support aggressive tax planning or artificial schemes. It is a practical tool for conscientious businesses that have taken advice and want to manage a theoretical or identified risk with greater confidence.
How Partners& can help with tax liability insurance
Partners& is a specialist provider of tax liability insurance for UK businesses and transaction teams.
If you’re planning a transaction, preparing for an exit, reviewing a historic tax position or managing a specific tax exposure, our specialist team can help you understand whether tax liability insurance could support the process and protect value.
Our approach to M&A transactions is built around clarity, accountability and relationships. We take the time to understand what each party needs, what the timetable looks like and where the pressure points may arise.
Successful tax insurance placements rely on clear information and joined-up advice. We work with experienced corporate lawyers, tax advisers, accountancy practices and advisory teams across the UK, helping to streamline communication, manage insurer questions and reduce duplication across the process.
We combine specialist market knowledge with a practical, relationship-led approach.
From the outset, we help clarify the background to the request, the advice already taken, the potential quantum and any communication with HMRC or another tax authority. Our aim is to help you present the risk clearly, access appropriate insurer appetite and move forward with confidence.
Talk to Partners& about tax liability insurance
If you would like to discuss a particular tax matter, we’ll need to understand the following:
- Background to the request – is there an M&A transaction in sight or in progress, or are you looking for day-to-day tax risk management?
- What advice has been taken to date, and is it in a format that can be shared?
- Has a calculation of the potential quantum been carried out, and is this up to date?
- Has there been any communication with the tax authority specifically on the issue?
Get in touch with our friendly team to find out how we can help
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