In many private M&A transactions, tax is treated as a due diligence hurdle – something to deal with once heads of terms are signed. In the media, marketing and advertising (MM&A) sector, that approach carries particular risk.
These businesses are typically built on people, IP, contracts and future earnings, with evolving revenue models, cross‑border activity and organic growth adding layers of tax complexity. As a result, tax issues often surface late, introducing delays, price chips or, in some cases, threatening the deal altogether.
Headline numbers may look strong, but issues around IP ownership, VAT, share incentives or contractor models can quietly erode value and undermine buyer confidence at exactly the wrong time.
As a CFO, we know that you are already juggling commercial negotiations, modelling and operational readiness. A late‑stage tax surprise can undo months of work.
That’s why we developed My Tax Partner – a senior, partner‑led service from HaysMac designed to give CFOs in media, marketing and advertising businesses clarity and control over their tax position well before a deal goes live.
Through regular, agenda‑driven discussions, we help you identify and manage sector‑specific tax risks early, so you can prepare strategically rather than react under pressure.
With the right preparation, tax becomes a lever – not a liability.
Why tax is still the deal‑breaker no one anticipates
In agency and marketing transactions, focus naturally falls on valuation multiples, client concentration, earn‑outs and leadership retention. But tax risks – often technical or historic – can quickly disrupt deal momentum when they emerge during diligence.
Common seller surprises include poorly documented EMI or growth share schemes, VAT liabilities from international services, misaligned IP ownership, and founders discovering late that Business Asset Disposal Relief (BADR) does not apply as expected.
For buyers, undiscovered tax exposure can distort integration plans and post‑deal returns.
In both cases, the result is the same: delay, uncertainty and a weakened negotiating position.
A proactive tax review well ahead of diligence surfaces these issues early – when there is still time to resolve them or reset expectations.
The tax risks that surface too late
When deals accelerate, tax issues often emerge at the worst possible moment. Rarely new, they usually reflect assumptions that have never been tested.
For sellers
- Group and IP structure
Agencies frequently grow through bolt‑on acquisitions or overseas expansion, leaving IP and trading activity misaligned. This is a key concern for buyers. - Share schemes and founder reliefs
EMI schemes and growth shares are common but often poorly documented or valued, creating employment tax risk. BADR assumptions may also prove incorrect, reducing post‑tax proceeds. - Contractor and employment status
Heavy use of freelancers and off‑payroll talent increases IR35, PAYE and NIC exposure, which can feed directly into deal pricing. - VAT and indirect taxes
Cross‑border services and evolving business models regularly create historic VAT risks uncovered during diligence. - Missed reliefs
R&D claims (particularly for adtech and platform development), capital allowances and losses are often missed, reducing EBITDA and cash flow.
For buyers
- Deal structure and funding
Under time pressure, buyers can miss opportunities to optimise tax efficiency and future exit planning. - Earn‑outs and roll‑overs
Common in agency deals, but tax outcomes vary widely depending on structure, timing and performance conditions. - Leases, dilapidations and capital items
Studio space and long leases can distort working capital and valuation assumptions if overlooked.
The issue across all of this is timing. Without early review, these risks surface when there is least flexibility to address them.
What CFOs should do before a deal moves forward
A pre‑deal tax review is the most effective way to reduce risk and strengthen your negotiating position.
Key actions for CFOs include:
- Review group and IP structure for legacy risks
- Confirm BADR eligibility and shareholder positions
- Ensure share schemes and LTIPs are robustly documented
- Model the deal under current tax rules
- Identify unclaimed reliefs such as R&D and capital allowances
- Review contractor and employment status
- Sanity‑check the proposed deal structure from a tax perspective
Staying one step ahead of the deal
In fast‑growing agencies, finance teams are lean and focused on delivery. There’s rarely an in‑house tax specialist, and strategic tax planning is often deferred until it becomes a blocker.
My Tax Partner acts as your outsourced, strategic Head of Tax, giving you senior‑level, partner‑led insight without the cost of a full‑time hire. Crucially, we work with you before the pressure of a live transaction.
We help you to:
- Identify hidden risks early
- Model tax outcomes across different deal structures
- Optimise group and shareholder positions
- Present a clear, credible tax narrative in diligence
- Strengthen confidence with investors or PE buyers
This is not formal tax due diligence. It is strategic pre‑deal preparation, delivered by a team with deep experience across the media, marketing and advertising sector.
Start the conversation early
Now is the time to lay the groundwork.
Book an exploratory My Tax Partner session to stress‑test your tax position, surface risks and opportunities, and build a practical, deal‑ready strategy that protects and enhances value.
Contact Dougie Todd, Partner and Co-Head of VAT, to book your session. Let’s talk – before the deal gathers pace.
