By Bill Anderson, FCCA, Chief Executive Officer, Assetica — 2026-07-21
Whether you call it a company valuation or a business valuation, the exercise is the same: normalise the earnings, run the three approaches, then value the specific shareholding rather than the whole company. What UK limited companies actually sell for, the discounts on minority stakes, and what HMRC accepts.
Owner-managed accounts rarely show true earning power: directors pay themselves below market and take dividends, or the company carries family salaries and one-off costs. Normalisation restates profit as a buyer would experience it, with market-rate remuneration and one-offs removed. Normalised EBITDA commonly differs from reported profit by 20 to 40 percent in either direction, so valuations built on unadjusted accounts start from the wrong number.
Market approach: 4x to 8x normalised EBITDA for established private UK companies, below for owner-dependent firms, above for contracted recurring revenue. Income approach: a DCF, leading where the future differs from the past. Asset approach: net assets at current values, the floor, leading for property-heavy companies. The reconciliation between them is itself information: earnings far above the asset base means the price rests on goodwill a buyer will test.
A minority holding cannot control dividends, appoint directors or force a sale, and has no ready market, so discounts for lack of control and marketability apply, shaped by the articles and any shareholders' agreement. A 30 percent stake in a GBP 2 million company is not worth GBP 600,000; it may be worth materially less per share than the controlling interest.
Valuations arise for CGT on disposals, EMI and growth share grants, probate and IHT, and connected-party transfers. HMRC's Shares and Assets Valuation examines workings in contested cases. What survives: a stated date and basis, recognised methodology, evidenced comparables, normalised earnings, and independence from the party benefiting from the answer.
UK owners relocating to the UAE need one consistent company valuation feeding HMRC (disposal, temporary non-residence), the Golden Visa business route (AED 2 million equity threshold) and UAE corporate tax. Inconsistent numbers across authorities are individually convenient and collectively indefensible, which is why a single team in London and Dubai matters.
How do you value a limited company in the UK?
Three approaches, reconciled into a range. The market approach applies a multiple to maintainable earnings, typically 4x to 8x EBITDA for established private UK companies, lower for smaller or owner-dependent ones. The income approach builds a discounted cash flow from realistic forecasts. The asset approach values what the company owns, net of liabilities, and acts as a floor. Earnings are normalised first, adjusting directors' remuneration to market rate and stripping one-off items, because the unadjusted figure misleads in either direction.
What multiple do UK limited companies sell for?
Most established private companies change hands between 4x and 8x normalised EBITDA, with smaller owner-managed businesses often below that range and businesses with contracted recurring revenue above it. The multiple is not a lottery: it reflects size, customer concentration, owner dependence, growth and how transferable the earnings really are. Quoted-company P/E ratios are a poor guide, because private company shares carry discounts for illiquidity that listed shares do not.
Will HMRC accept my company valuation?
HMRC accepts valuations it can test: a stated valuation date and basis, recognised methodology, evidenced comparables and normalised earnings, prepared by someone independent of the outcome. Valuations arise with HMRC for Capital Gains Tax on disposals, EMI and other share scheme grants, probate and Inheritance Tax, and shares transferred between connected parties. In contested cases, Shares and Assets Valuation examines the workings, so the report that shows its reasoning is the one that survives.
Is a 30 percent shareholding worth 30 percent of the company?
Rarely. A minority holding in a private limited company cannot control dividends, appoint directors or force a sale, and there is no ready market to sell it into, so discounts for lack of control and lack of marketability apply. Depending on the rights attached to the shares and the articles, a small minority stake can be worth substantially less per share than a controlling interest. Any share valuation must value the specific holding, not just divide the company value.
How much does a UK limited company valuation cost and how long does it take?
For a typical owner-managed company, a professional valuation is delivered in five to seven business days from complete information, with the fee depending on the company's complexity and the purpose: an indicative exercise costs less than a report prepared for HMRC or court use. Assetica prepares UK company valuations from its London and Dubai offices to RICS and IVS standards.