Corporate & Formal Reports
Formal Valuation Report Structure for HMRC and Court Use
A formal report must defend itself in front of HMRC, a court, or trustees. Here is what mine contains and why.
An indicative valuation is a private working number. A formal valuation report is a signed, defensible document used as evidence in HMRC reviews, court proceedings, trustee decisions, or material corporate transactions. The structure, methodology, and presentation all matter as much as the headline number. This guide walks through the anatomy of a formal report so you know what to expect and how to instruct one well.
Scope, basis, and instruction
A formal valuation report opens with the instruction, purpose, standard of value, valuation date, and subject; the body then evidences methodology, comparables, normalisations, and the equity bridge to the signed opinion. A clear scope prevents downstream confusion and protects all parties.
Company background and shareholding structure
A concise factual summary of the company: incorporation, registered office, principal activities, trading history, sector, locations, key personnel, group structure, and current shareholding. This is fact-based, not promotional. Three to five pages for most UK SMEs.
Financial analysis
Three to five years of statutory accounts summarised with key ratios and trends. Then a separate adjusted-earnings analysis: each adjustment to EBITDA documented with rationale, supporting evidence, and quantum. The adjusted earnings series is the foundation of the multiple-based valuation, so transparency here is non-negotiable.
Valuation methodology and evidence
Primary method (typically adjusted EBITDA multiple) explained with the multiple range and the specific position chosen, justified against the qualitative factors. Supporting comparable evidence: completed UK SME transactions in the same sector and size band, anonymised where confidentiality requires but with sufficient detail to evidence the multiple. Secondary methods (DCF, net asset) presented with their workings as cross-checks.
Sensitivity and scenario analysis
Sensitivity tables showing how the valuation changes with movements in the multiple, the earnings, the discount rate, or other key inputs. Where appropriate, scenario analysis covering downside cases (loss of key customer, founder departure) and upside cases (forecast delivery, sector tailwind). Buyers and judges expect this analysis.
Conclusions, range, and point value
A clear statement of the valuation range and (where required) a single point value, with the rationale for the position within the range. The conclusion section is typically 1 to 2 pages and is the part most readers will study most closely.
Declarations and appendices
Valuer declarations: independence, qualifications, sources, limitations. For court reports, the CPR Part 35 expert declaration and statement of truth. Appendices include the financial summary tables, comparable evidence detail, methodology references, and CV of the valuer signing.
Key takeaways
- Scope, methodology, evidence, and declarations all matter.
- Adjusted-earnings transparency is non-negotiable.
- Sensitivity analysis is expected by sophisticated readers.
- CPR Part 35 declarations are standard for court reports.
Frequently asked questions
How long is a formal valuation report?
Typically 25 to 50 pages including appendices. The length is driven by the complexity of the business and the evidence required, not by inflation for impressiveness.
Is a formal report different from an indicative range?
Yes. An indicative range is private and informal. A formal report is a signed deliverable with full methodology, evidence, and declarations suitable for HMRC, court, or trustee reliance.
How long does a formal report take to prepare?
Two to four weeks from receipt of the information pack. Faster for urgent court timetables. The information pack is the critical path; the analysis runs in parallel with company review.
What does a formal report cost?
Typically £2,500 to £7,500 plus VAT, quoted in writing before instruction. The figure depends on complexity, evidence requirements, and whether oral evidence is anticipated.
Will my report be accepted by HMRC?
Reports built to the format we use, with documented methodology and comparable evidence, are routinely accepted. We support clients through HMRC clearance at no additional fee.
Can the same valuer give oral evidence in court?
Yes. We accept court instructions with the expectation that we may attend court for oral evidence if required. The fee for attendance is quoted separately at instruction.
Want a real number for your business?
Free, confidential indicative valuation from the BusinessValuation.co.uk team.