Sole trader client with two main customers, transferred business to a limited company in spring 2012.
Now trying to complete the valuation and get CG34 valuation clearance but am struggling to know how to proceed.
Customer A contract novated on 31 May with all income after that date going through the limited company. Customer B took longer to process the paperwork and only novated the contract on 31 July. This was purely due to administrative problems.
So sole trader has trade in April and May with both customers, then June and July with customer B only. Limited company has income from customer A in June and July, then both customers A and B from August onwards.
The initial plan had been to transfer the entire business to the limited company on 31 July, when all had been finalised but in reality I suspect we seem to have a part disposal at 31 May and the final disposal at 31 July. Is there any way to avoid this? Do I really have to split the business and do two valuations, one at each date, two CG34s etc or am I missing some way round this?
I have prepared an initial valuation report as at 31 July, and have increased the 4 month period to July 12's profit to take into account both contracts for 12 months to get to an annual amount. But I worry now as the method of doing this shows that one customer novated on 31 May, and is this going to be queried as a part disposal?
Sole trader accounts have been completed to 31 July as that is when the sole trade stops altogether. If there was a part disposal at 31 May I would presumably have to create another set of accounts to send off with that valuation??
This is my first valuation report and I had the figures reviewed by someone more experienced, who agrees they are reasonable but said the way I have calculated the uplift to a full year looked odd. (I calculated by saying the four months to 31 July included 6 'customer months' (i.e. 2 each in April and May, 1 in June and July) and that the full year would include 24 'customer months' so the uplift should be 3x the original.
PS Yes murphy1 I also have times when I feel like giving it all up!!