Understand the Potential Cost Before You Commit

When taking over a business, acquiring a trading operation or considering a transaction where employees may transfer, one question can have a major effect on the commercial decision:

What employment liabilities could come with the deal?

RH&L has launched a new TUPE Liability Calculator for 2026/27, designed to provide businesses and advisers with a quick, high-level estimate of potential employee-related liabilities before progressing further.
Jump to the TUPE Liability Calculator

Under the Transfer of Undertakings (Protection of Employment) Regulations, commonly known as TUPE, employees may be protected when a business or part of a business changes employer, as well as in certain service provision changes. The size of the business does not determine whether TUPE applies. [gov.uk], [acas.org.uk]

Why TUPE matters commercially

TUPE is not simply a question of whether employees move from one employer to another.

Where TUPE applies, employment contracts generally transfer to the incoming employer together with employees’ continuity of employment and existing terms and conditions. GOV.UK also explains that certain existing employment liabilities can pass to the new employer. [gov.uk]

Acas similarly advises that transferring employees retain their length of service and employment contract, and that relevant terms can include pay, holiday entitlement, contractual enhanced redundancy arrangements and other contractual benefits. [acas.org.uk]

That makes the employment position an important part of the due diligence behind any proposed acquisition or transfer.

A business that appears attractive based purely on turnover, rent or purchase price can look rather different once the potential cost of the workforce is considered.

What does the RH&L TUPE Liability Calculator do?

The new RH&L TUPE Liability Calculator provides an indicative assessment using some of the principal factors that can influence potential employment liabilities.

Users can enter:

number of full-time employees;
number of part-time employees;
average length of employment;
average weekly gross salary;
statutory redundancy multiplier;
notice period liability;
average untaken holiday entitlement; and
Employer National Insurance rate.

The calculator then provides an estimated Total Termination Cost.

The results can also be emailed, allowing the calculation to be retained as part of the initial appraisal or due-diligence process.

Why have we built it?

In many commercial transactions, employee liabilities are considered too late.

A prospective purchaser, incoming tenant or operator may initially concentrate on:

purchase price;
rent;
turnover;
profitability;
stock and fixtures;
property liabilities; and
the cost of taking over the premises.

But if TUPE applies, the existing workforce cannot simply be viewed as a fresh group of employees starting from day one.

Employees assigned to the transferring business will generally transfer automatically where TUPE applies, and employers cannot simply select which qualifying employees they would prefer to take. [acas.org.uk]

That can materially change the economics of a proposed deal.

A useful early-stage due diligence tool

The calculator is particularly useful when carrying out an initial commercial assessment of a potential:

business purchase;
pub, restaurant or hospitality acquisition;
lease transaction involving an existing operation;
management or operational transfer;
outsourcing arrangement;
insourcing arrangement; or
change of service provider.

For example, two apparently similar businesses might have very different potential employee exposure.

One may have a small workforce with relatively short service. Another may employ substantially more people who have been with the business for many years.

Those differences may not be immediately apparent from the headline purchase price or trading figures, but they could be important when assessing the overall transaction.

It isn’t a substitute for TUPE due diligence

The calculator deliberately provides an indicative, high-level estimate rather than attempting to determine the precise legal liability associated with every employee.

Actual liabilities can depend upon matters including individual employment contracts, collective agreements, precise continuous service, accrued holiday and the particular circumstances of the transfer. [acas.org.uk]

There is also an important distinction between estimating possible workforce costs and establishing whether TUPE applies to a particular transaction in the first place. TUPE can be a complex area, and Acas recommends obtaining legal advice where there is uncertainty over whether somebody is protected. [acas.org.uk]

The calculator should therefore be used as a commercial screening tool, not as a replacement for employment law advice.

Look at the liability before agreeing the deal

The purpose is simple.

Before committing to a transaction, businesses should have a better understanding of what may be coming with it.

Identifying a potential TUPE exposure at an early stage gives purchasers, tenants, operators and advisers the opportunity to investigate further, request the necessary employee information, stress-test the transaction and reflect potential liabilities in negotiations.

A few minutes spent assessing the workforce at the beginning of a transaction could reveal a cost that materially affects whether the proposed deal stacks up.

Try the TUPE Liability Calculator

Use the new RH&L TUPE Liability Calculator for 2026/27 to obtain an initial estimate of potential employee liabilities and factor them into your commercial assessment before committing to a transaction.

Calculate Your TUPE Liability

The calculator provides an indicative estimate for preliminary commercial assessment only and does not constitute legal or employment law advice.