What are mergers and acquisitions (M&A) and what do M&A tax professionals do?

Mergers and acquisitions (M&A) is a term that refers to the management, financing, and strategy involved with buying, selling, and combining companies.

Every M&A deal has tax implications. M&A tax professionals assist with deal negotiations and help manage the entire process from a tax perspective. They guide companies through the possible implications of a potential transaction and structure the transaction to minimise tax liability and ensure compliance.

They also carry out the necessary tax due diligence; input into sales and purchase agreements (SPAs) and financing documents; and complete the tax-related and post-deal activities. Their work may also involve assisting organisations with cross-border M&A transactions.

Key responsibilities

Responsibilities will vary, but examples include:

  • Providing tax structuring and tax due diligence advice on a wide range of transactions.
  • Support the raising of finance for acquisitions with a view to maximising tax relief for the borrower and withholding tax on financing costs.
  • Advising investors as to how they will be taxed on their investment return.
  • Advising UK and international clients on transaction tax.
  • Assisting with carrying out detailed technical research.
  • Understanding the client's business and helping to identify areas for the provision of tax and other services (management incentives, VAT).
  • Ensuring that tax compliance requirements are met throughout the deal.

Why are they important?

The M&A process can lead to substantial tax saving opportunities as well as potential risks. M&A tax professionals can advise the best tax position during all phases of a transaction which results in the most advantageous business decisions while mitigating risk.

Skills needed for this role

An appropriate professional qualification (such as the ACCA Qualification) is usually required for a career in M&A tax. Strong communication skills, both written and verbal, as well as excellent analytical skills are also essential.

Strategic Professional Options examinations linked to this role

Advanced Taxation

Career opportunities presented by this role:

The field of M&A is expanding and so opportunities are increasing. There is a structured career path, and professionals can get involved in a variety of exciting and challenging deals.

Competencies

High level competencies required by M&A tax specialists include:

  • Corporate and business reporting

    A. Prepares financial statements, corporate financial and integrated reports for external stakeholders using appropriate technology.

    B. Leads effective decision making through analysing, evaluating and communicating performance and position of entities.

    C. Prepares financial statements for groups of entities using appropriate technologies.

    D. Monitors, critically evaluates, and advises on the relevant accounting standards, regulations, conceptual and financial reporting frameworks.

  • Stakeholder relationship management

    A. Positively develops relationships with internal and external stakeholders.

    B. Communicates and gains commitment from internal and external stakeholder.

    C. Uses emerging technologies to collaborate and communicate effectively with stakeholders.

    D. Applies professional and ethical judgement when engaging with stakeholders.

    E. Aligns organisational strategic objectives with stakeholder needs and manages expectations.

  • Taxation

    A. Communicates knowledge of the operation and scope of the tax system, obligations of taxpayers, and the implications of non-compliance and advises on tax planning.

    B. Advises ethically on strategic tax plans and computes the tax liabilities of individuals.

    C. Advises ethically on strategic tax plans and computes the corporation tax liabilities of individual companies and groups of companies.

    D. Explains and computes the effects of value added tax (VAT) / goods and services tax (GST) and indirect tax on incorporated and unincorporated businesses and advises appropriately.