and shall use reasonable endeavours to ensure that they are finalised as soon as reasonably practicable. The Covenantors shall ensure that all documents are true and accurate and not misleading.
3.1 Under pay and file it is relatively normal for accounts and tax computations to be submitted to HMRC and for there to be no correspondence other than an acknowledgement of receipt. Therefore, if there is correspondence it will normally be in connection with either an aspect enquiry or a general enquiry into the tax computations of the Company. 3.2 The drafting above assumes that the Buyer will become more involved if matters reach this stage. The role of the Buyer is still partly a passive one, but there is now the expectation of some input into the subject matter of the correspondence. However, if there is any dispute between the Buyer and the Sellers as to the framing of responses to HMRC, it is likely that the views of the Sellers will prevail, except in respect of matters which are patently incorrect or fraudulent. This is on the basis that the Sellers can make the point to the Buyer that they are the ones at risk with respect to any additional Tax Liabilities. However, the Buyer will understandably be concerned not to be at risk of being associated with any form of aggressive tax planning which results in the information to be provided to HMRC being incorrect, misleading or less than complete.
4 The Tax Computations for the Period Straddling Completion
9.6 The Buyer shall ensure that all material communications to the relevant Tax Authority in respect of the accounting period in which Completion takes place and which may give rise to a claim by the Buyer against the Covenantors under this Deed shall first be sent to the Covenantors. The Buyer shall consult and shall procure that the Company shall consult with the Covenantors regarding the contents of all such communications. The Buyer undertakes that it shall procure that the Company shall have due and proper regard to such comments, provided that such comments are reasonable and are provided to the Buyer in a timely manner.
9.7 The Buyer shall procure that the Sellers and their duly authorised agents are allowed such reasonable access to the books, accounts personnel, correspondence and documentation of the Company and such other assistance as may be reasonably required to enable the Covenantors to exercise their rights under this clause 9.
179
Made with FlippingBook Learn more on our blog