There’s a neat, slightly nerve-wracking image that keeps turning up in meetings: a founder at their kitchen table, cup of tea cooling, staring at a valuation report and wondering whether it will stand up if an inquisitive trustee, lender or HMRC reads it with a magnifying glass. That emotional moment — the worry that a lifetime’s work might be priced unfairly, or that the sale could stall over technicalities — is exactly why the recent changes to employee ownership rules matter so much.
From a legal and tax point of view, the landscape shifted in late 2024 and 2025. The Autumn Budget of 30 October 2024 introduced reforms to how Employee Ownership Trusts (EOTs) are taxed and how trustees must behave when buying shares for the benefit of staff. HMRC’s updated guidance makes clear that for disposals taking place on or after that date, trustees must “take all reasonable steps” to ensure they aren’t paying more than market value — and they should be ready to justify the commercial reasonableness of any deferred consideration or interest. In short: employee ownership trust valuations now need to be more robust, better documented and defensible.
That doesn’t mean founders can’t use an EOT — far from it. High-profile moves show the model is genuinely mainstreaming. Recent transitions of sizeable businesses into employee ownership underline both the appeal and the scrutiny that follow such deals: when a well-known retailer or national brand opts for an EOT, journalists, advisers and tax officials inevitably examine the mechanics and the price. Those public stories make clear one thing — trustees and sellers are expected to be able to explain, step by step, how they arrived at the figure.
So where do valuations go wrong? In practice, advisers spot a few recurring issues. Forecasts that lean towards optimism without stress-testing; inconsistent treatment of cash, debt or related-party balances; and the use of comparables that aren’t really comparable. Those kinds of sloppy choices are no longer just “how we do it here” problems — they become a liability because trustees must actively challenge aggressive assumptions. If the trustees don’t do that, they risk breaching their duties; if they accept them without question, HMRC scrutiny becomes more likely.
That’s where finance services outsourcing can make a surprising difference. Clean, consistent financial data is the raw material of a credible valuation. Modern finance services outsourcing providers don’t just post journals and reconcile banks; many now offer centralised data models, automated reconciliations, audit-ready close packs and scenario modelling. When those elements are in place, a valuer can move from guessing the numbers to testing them — and trustees can see, in a reproducible way, where the real value sits. In other words, finance services outsourcing can reduce valuation friction by delivering the disciplined inputs that make forecasts and multiples believable.
Practically, what should founders and trustees do differently now? Start earlier, document harder and invite independent challenge. A short checklist looks like this: commission an independent valuation or at least be ready to explain why an existing report is reliable; keep detailed working papers for forecasts and stress tests; document how cash and intercompany balances are treated; ensure trustee minutes show active consideration of price; and, where lenders are involved, make transparent the funding model and any security. For higher-value transactions, trustees may even need their own valuation rather than relying solely on a seller’s report.
For the finance team, the goal is clear – get your month-end sorted, automate the grunt work, and make everything consistent. Sounds simple, right? But when you’re actually doing it, it’s anything but trivial. Still, when you nail it – when your books close on time every month, everything’s reconciled, and your KPIs are crystal clear – the valuation process suddenly becomes ten times easier. Your valuers aren’t chasing missing numbers or puzzling over discrepancies; they’ve got what they need.
This is where outsourced teams can be lifesavers – particularly the ones who’ve invested in proper automation rather than just throwing more people at the problem. They maintain clean, consolidated ledgers instead of spreadsheet chaos, and can pull together audit-ready reports whenever you need them, not after three days of frantic preparation. All of this speeds up your valuation cycles massively and gives trustees the rock-solid evidence they need when someone inevitably questions the price. You’re not scrambling to justify your numbers – you’ve got them backed up six ways from Sunday.Retry
And here’s something people often forget – a valuation isn’t just a spreadsheet exercise. You’re telling a story. To your employees who are about to become owners. To trustees who need to trust the numbers. Sometimes even to the wider public who’ll be watching how this unfolds.
So when you present those figures, ditch the jargon. Explain what you’ve assumed and why. Walk people through what happens if things go south. Show them you’ve had independent experts kick the tyres. Yes, this keeps HMRC happy – but more importantly, it builds genuine trust with the people who’ll be living and breathing this EOT long after the paperwork’s filed.
In today’s world, where everyone’s skeptical and trust is earned rather than given, that kind of openness matters just as much as getting the numbers right. Maybe more.
Valuing a business for sale into an EOT has always required care. What’s new is how loudly the authorities and advisers are insisting on rigour and evidence. That may feel like extra work at the time, but it’s also an opportunity: well-prepared companies land fairer, more defensible prices, and finance teams that adopt modern outsourcing techniques can turn a messy valuation process into a disciplined, almost mechanical one. For founders who care about legacy and trustees who care about duty, that’s exactly the kind of assurance everyone needs.