Expert Witness Journal Issue 65 February 2026 - Flipbook - Page 14
Predictions from the FHM
forensic accounting experts
by Fiona Hotston Moore & Tom Arnold
Our experts, Fiona Hotston Moore and Tom Arnold,
share their predictions for 2026.
Shadow Experts/Advisers
We expect to see greater use of shadow advisors to,
for example, assist in assessing 昀椀nancial disclosures,
reviewing Single Joint Expert or Party Expert
reports and giving independent tax input on
settlement proposals.
Fiona and Tom are forensic accountants at FHM and
regularly write expert reports in 昀椀nancial disputes.
Here they share their predictions for their area of
expert witness work.
As Shadow Expert we can help solicitors review the
opinion of the court-appointed expert(s) explaining
the key assumptions and sensitivities.
Business valuations
As valuation experts we value businesses relating to
昀椀nancial disputes but also to assist business owners
in strategic planning.
The impact of AI on tax compliance
Over the next few years, we anticipate that HMRC
will be making greater use of technology and AI to
identify tax evasion. This will result in focused tax
investigations and the need for experts to consider
the impact of tax disputes on company valuations
and personal 昀椀nancial disputes. This can be trickier
where the tax investigation is ongoing; tax disputes
can take years to resolve. As 昀椀nancial experts we
will be required to give an independent view on the
contingent tax liability.
We anticipate a relatively benign economy in the
start of 2026 with an expectation of two further
small cuts in interest rates and modest cost in昀氀ation.
This should help smaller businesses and tends to
result in more consistent trading performance. In
valuing businesses, we will typically review historic
accounts to assess the value that the business will
generate in the future to its shareholders. Valuation
is inherently subjective and becomes more so in
periods of uncertainty or 昀氀uctuating 昀椀nancial
performance.
Business fraud and fraud on charities
Typically, in more volatile economic times, we will
receive more instructions for updating business
valuations to address a perceived change in the
fortunes - and therefore the value - of a company.
Reported fraud is increasing and we expect this to
continue. In our experience, all too often simple
controls and checks would have picked up internal
frauds. Fraud within charities and family businesses
are particularly stressful for all involved. We advise
management and those charged with governance to
get an independent review of internal checks and to
act on any concerns expeditiously. Furthermore, if
you have a feeling that there might be an issue, we
recommend getting an independent view as early as
possible.
In 2026, we expect an uptick in business owners
looking for an exit or a partial exit. In light
of recent tax changes they may be considering
alternatives to Employee Ownership Trusts (EOTs).
We are often asked to give an independent view on
company valuation before the business owner starts
a sale process or undertakes succession planning.
We anticipate succession and associated family tax
planning will stay on the agenda for business owners.
EXPERT WITNESS JOURNAL
12
FEBRUARY 2026
