Thinking about selling your pub this year? Here’s what you need to know

1. Instruct an agent who is a specialist in selling hospitality businesses

Utilising the expertise of a specialist property agent will help maximise the exposure of your business to the market and find the right buyer for you. Ask yourself the following questions when choosing an agent:

• Do they have experience selling pubs and restaurants?
• Can they demonstrate comparable sales evidence?
• What marketing and selling tools can they offer?
• Can they explain and justify their sales advice and give you a realistic/honest guide price?

The benefits of choosing Christie & Co as your agent also include access to other helpful businesses within the Christie Network, such as Christie Finance and Venners, who can provide funding and stock-taking services.

2. Instruct an experienced solicitor

Alongside a specialist agent, it is important to engage a solicitor who has experience transacting pubs as Trading Going Concerns (TOGC) and staff transfers (TUPE). We can help this process by recommending a professional from a list of solicitors with whom we have worked previously.

3. Ensure your accounts are in order

It is just as important to engage an experienced accountant who can provide accurate tax and VAT advice, and help you prepare the necessary accounts and trading information that prospective buyers will request to see. A lack of documented trading information can impact your sale and cause significant delays.

Key accounts include:

• 3 years P&Ls
• 4 quarters VAT returns
• Management accounts from last year end
• Trade splits
• Barrelage

Understanding the VAT status of your pub is crucial because it affects the overall financial structure of the transaction. If your pub is VAT-registered, you will need to charge VAT on the sale price or rental income, which can impact the buyer's budget and financing plans. Buyers must evaluate their own VAT status and how it aligns with the purchase to ensure they can reclaim VAT where applicable.

Additionally, the purchase structure—whether it is a share sale or an asset sale—can influence the VAT treatment. Buyers should consult with their accountants or tax advisors to understand the best approach for their situation.

Considering the funding position is also essential. Buyers need to ensure they have the necessary funds to cover not only the purchase price but also any VAT that may be applicable.

Finally, buyers should be aware of any extra associated costs, such as legal fees, due diligence expenses, and increase stamp duty. Proper planning and consultation with financial advisors can help mitigate unexpected costs and ensure a smooth transaction.

4. Provide your agent and solicitor with proof of ownership

Your agent and solicitor will need to see proof of your ownership. If you own the freehold, this will be a copy of your title from the Land Registry which can be obtained by your chosen agent. If you own the leasehold, you will need to provide your landlord’s details and a signed copy of your lease, which we can then decipher the necessary information from.

5. Ensure your business is compliant and obtain the certification documents to prove it

Buyers will require several certificates which confirm that your business has been assessed and is fully compliant: it is necessary to obtain a copy of these documents.

A vital certificate is an EPC. An EPC rates how energy efficient a building is, from “A” (the most efficient) to “G” (the least efficient). MEES set a threshold for the minimum EPC rating that a landlord must achieve for a property; since 1 April 2018, a landlord has been unable to let or re‑let commercial property that has an EPC rating lower than “E”. Properties with an EPC rating of “F” or “G” are treated as “sub-standard”.

Although non-compliance with MEES will not invalidate a lease, if a landlord grants a new lease of property, or continues to let a property, that is non-compliant with MEES then the landlord will expose themselves to enforcement action and sanctions from the local weights and measures authorities.

Previously set for 2027, commercial landlords and property owners now have until 2028 to meet the requirement of achieving an EPC rating of “C” for their properties.

While the immediate focus is on achieving a “C” rating by 2028, the commercial property sector still aims to enhance the EPC rating of properties to a “B” level by 2030.

Other important documents include:

• Asbestos survey
• Gas certificated
• Environmental Heath (EHO)
• Fire risk assessment  
• Septic tank certification and discharge licence
• Electrical safety

Compliance has become a more significant factor in transactions recently, with buyers and their legal teams scrutinizing it in greater detail. To facilitate the sale of your business, we recommend obtaining all necessary compliance documentation before going to market. This ensures that once a buyer is found, the transaction can proceed quickly without affecting the price.

In particular, if you are selling to a tenant pub company or if your buyer needs to raise bank funding, the deal simply won't move forward unless all compliance requirements are satisfied. In some cases, buyers may not even make an offer until they have reviewed this documentation.

6. Prepare a record of your staff

You will also be required to provide buyers with a list of staff members and the details of their role, working hours, length of tenure with the business, holiday entitlements and rates of pay.

This information is now a particular focus for prospective buyers due to recently announced increases in the National Minimum and Living Wages, and employers’ National Insurance contributions, which will come into effect this Spring and result in a rise in labour costs, so it’s important to ensure you have an up-to-date employee handbook and contracts in place.

7. Prepare an inventory

It’s advisable to prepare an inventory of things such as fixtures, fittings and stock levels from the outset, to clearly outline to buyers what’s included in the sale and any personal items that you may want to keep.

A record of average stock levels held on site gives the buyer an idea of the items and products that will be available for purchase on completion, known as stock on valuation (SAV).

We advise preparing a list of fixtures and fittings with an independent valuation of these items.

8. Complete any necessary repairs and cosmetic upgrades

The exterior and interior of your property will be one of the first things that prospective buyers review when looking at your business and we all know first impressions count. Take the time to make any necessary repairs or cosmetic upgrades to your property to ensure it’s looking its best when you are ready to take professional marketing photos and put your business on the market.

9. Understand if the property is listed as ACV

It is important to determine if the business has been registered as an Asset of Community Value (ACV) and whether the sale structure will require notifying the local authority of your intention to dispose of the business. This notification could trigger a 6-week interim moratorium period, followed by a 6-month moratorium, allowing the community the right to bid.

For more information about bringing your pub to the market, contact:

Richard Wood, Regional Director - Pubs & Restaurants (South)
M: +44 (0) 7778 880 583
E: richard.wood@christie.com