A recent article in the Financial Times1 reports what tax advisers have been experiencing for some time: HM Revenue & Customs (HMRC) have been stepping up enquiries of how founders are taxed when they sell their businesses, particularly where consideration is tied to continued involvement — earnouts, rollover equity and performance-linked payments common in high-growth start-ups. Increased challenges include a growing involvement of HMRC's technical team that typically engages in more thorough tax enquiries, greater focus on the terms of share purchase agreements (SPAs) and sale documentation and nudge letters, etc. Together, these measures raise concern that HMRC’s more aggressive approach also captures genuine commercial arrangements. This advisory discusses the earn-out (business performance) alternative for individual sellers where the consideration is cash-based.