3.1.6 of the tax covenant in respect of voluntary acts of the Buyer or the Company after Completion is a more likely source of protection for the Covenantors from this cost.
3.8.5 The Recovery from the accountants is covered by clause 7.2 of the tax covenant: as the Covenantors will have made payments in excess of the sums recovered, they will be entitled to the amount recovered of £10,000, less any related costs. This amount should not be taxable on the Company, on the basis that it represents a Zim-style right, so there should not be any deduction for tax on the sum recovered.
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