Corporate tax management behaviours during initial public offerings process: Evidence from UK IPOs

Han, Ning 2021. Corporate tax management behaviours during initial public offerings process: Evidence from UK IPOs. PhD Thesis, Cardiff University. Item availability restricted.

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Abstract

This study investigates tax management behaviours of companies listed on London Stock Exchange by IPOs during 2004 to 2018. It is found that in the IPO process corporate tax management behaviours have significant change, companies consider tax structure in the process of going public. There is evidence that with additional scrutiny prior to IPO companies settle outstanding or disputed tax liabilities with the relevant tax administration. In addition, with enhanced scrutiny in the IPO year and the second year after going public companies have higher tax charge. There is also evidence that in the year immediately prior to IPO and the year immediately after IPO companies engage in more tax management to reduce tax charge. In the year of going public companies defer a higher amount of tax liabilities to the future. The further analysis finds that corporate tax management behaviours are different between pre and post 2008 Banking Crisis, Main Market and Alternative Investment Market (AIM). In addition, corporate tax management behaviours during the IPO process vary by auditor change. The finding is robust to currency transition, proxy of tax loss carry-forwards and inclusion of company year ends with tax credits. The study contributes to the literature on tax management and management behaviours in IPO process. A significant contribution on methodology is developing a more accurate measure of tax management – ETRs standardised by statutory tax rate. The findings call for increased effort of the government and tax authorities on tax collection for IPO companies and enhanced scrutiny on IPO companies from market regulators, suggest market investors consider tax risks in evaluating firm value. It provides the evidence that investing in Main Market is less risky than AIM. The information of auditor change is useful in tax management identification. Keywords: Tax management; Initial public offering; Ownership structure; Tax risks

Item Type:	Thesis (PhD)
Date Type:	Completion
Status:	Unpublished
Schools:	Business (Including Economics)
Subjects:	H Social Sciences > H Social Sciences (General)
Uncontrolled Keywords:	tax management; initial public offerings; ownership structure; tax risks; signalling theory; banking crisis; AIM; Main Market; auditor change
Date of First Compliant Deposit:	5 November 2021
Last Modified:	05 Nov 2021 14:42
URI:	https://orca.cardiff.ac.uk/id/eprint/145320

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