Taxation query

[zappakat]

Right off the bat, yes I have an accountant but I'm just spit balling at the moment and it seems daft to ask the question so far in advance.

If I decide to close the company down and I get entrepreneurial relief on what's left in the business account @ 10%.
Once that is paid to me, if it then takes me over the personal base rate tax allowance is the higher rate of tax then applied to that sum?

So in effect it would be 55%?

Even writing it like that doesn't sound right but I guess this is why I'm double checking.
Just trying to work out my sums.

Any help appreciated
Z

[tractor]

...

Right off the bat, yes I have an accountant but I'm just spit balling at the moment and it seems daft to ask the question so far in advance.

If I decide to close the company down and I get entrepreneurial relief on what's left in the business account @ 10%.
Once that is paid to me, if it then takes me over the personal base rate tax allowance is the higher rate of tax then applied to that sum?

So in effect it would be 55%?

Even writing it like that doesn't sound right but I guess this is why I'm double checking.
Just trying to work out my sums.

Any help appreciated
Z

Entrepreneurs Relief

Google is your friend

Capital Gains allowance is entirely different to Income Tax and gains are taxed under the former and income is taxed under the latter. They are not double taxed or counted AFAIK

[TheCyclingProgrammer]

As above, but depends how you extract the funds when you close the company. If you take it out as dividends, its income tax and the usual thresholds apply. If you liquidate its distributed as a capital sum and liable to CGT, at 10% if you are eligible for ER. No further tax, just remember to put aside the costs of liquidating.

[zappakat]

Thanks for the replies.

That factsheet takes some reading, I hate accountancy speak

[northernladuk]

Thanks for the replies.

That factsheet takes some reading, I hate accountancy speak

Speak to your accountant then

[cojak]

And if you close down your company expect to go permie or HMRC will start to ask some hard questions.

[zappakat]

Speak to your accountant then

Oh ha ha, it's like you have accountancy tourettes..

Cojak, yeah I will be looking to go permie soon after. This contracting lark was always going to be short term.
Going for 8000 miles a year to 24000 is a killer.

[Waldorf]

My understanding is that the payout on closing the company is taxed as a capital gain and if you qualify for Entrepreneur's Relief, the tax paid os 10%.

This explains in some more detail - http://www.nixonwilliams.com/images/...-A-Company.pdf