Close one company and open another.

[ConfusedEasily]

I am considering closing down my Ltd. and starting my next contract with a new Ltd.
This is not an attempt to dodge IR35, just to draw a line under one phase of my life (getting divorced).

Am I about to put myself through some needless hassle and HMRC interest?

[Patrick@Intouch]

The term to be aware of is "Phoenixing". HMRC don't like it when people close one company and start another that is essentially doing the same thing.

However, this does happen and given your genuine reasons for wanting to pursue this action then it won't necessarily be an issue.

In doing this though you would potentially lose the ability to claim entrepreneur's relief on any capital distribution made when closing the existing company under new rules brought in, in April 2016.

There are several factors to consider including the amount of retained profit in the company and the structure of the shareholding.

[northernladuk]

http://www.bmmagazine.co.uk/in-busin...es-phoenixing/

It's interesting that HMRC's definition of phoenixing has changed. The official line used to be it was to start a new company after the old became insolvent or to escape obligations like guarantees but it's now been extended to cover TAAR. Doesn't mention that in the HMRC's pages about Phoenixing though.

[ConfusedEasily]

Just to be clear, no desire to extract entrepreneurs relief either. It'd just be straight CT and personal tax on anything else.

[northernladuk]

Was your ex part of the old. Company?

[TheFaQQer]

Just to be clear, no desire to extract entrepreneurs relief either. It'd just be straight CT and personal tax on anything else.

I can't see that attracting any attention from HMRC - you're closing the company down for legitimate reasons and paying the correct income tax, so there's nothing for HMRC to take exception to.

[ConfusedEasily]

Was your ex part of the old. Company?

Just the Secretary. It's really just to draw a line under one part of my life.

[TheCyclingProgrammer]

You won’t be able to take a capital distribution (ER doesn’t come into it) but if all retained profits are extracted as a dividend and all liabilities settled then simply closing down one company and starting another won’t be a problem.

[ladymuck]

Removing a secretary is a lot less faffing than closing and restarting but it's your call.

Have you considered a change of company name if that's what you want to achieve? It's a simple form to complete, nothing onerous, and then all you have to do is send off the new cert of inc to the bank etc to show the change. Oh and minute it like you do your divis

[northernladyuk]

Removing a secretary is a lot less faffing than closing and restarting but it's your call.

Have you considered a change of company name if that's what you want to achieve? It's a simple form to complete, nothing onerous, and then all you have to do is send off the new cert of inc to the bank etc to show the change. Oh and minute it like you do your divis

And a small plaque to commemorate the departure of the Secretary.

Do you own 100% of shares?