Closing down a limited company

[Biggles78]

Hi,
I'm the sole employee of my limited company. I've stopped trading as I've gone down the permanent employee route (thanks IR35), my company had been going for around 18 months and is solvent.

In the company accounts I have around £20k in assets. My new job's permanent salary puts me in the higher rate tax bracket for dividends of 32.5%. In this tax year, the company has generated a small amount of revenue (around £500) with a few hundred pounds worth of expenses.

I believe any money left in the account goes to the crown when closed, so I need to take as much of it out as I'm allowed.

What I'm not sure about is how much money I can take out of the company account before closing? Would it be:

revenue (£500) - costs (£300) =£200 profit, taxable at 20% (£40)

Dividend to myself = £19,960 (20k - tax liability)
Personal tax return on which I'll need to pay as a director = £6,487

?

Advice appreciated...

[northernladuk]

Don't you have an accountant to do it for you or did you stop using them already?

I don't think trying to run the numbers in a free forum of contractors is the way to so it. I'd say find a contractor specialist to close it down properly. Might cost you a few hundred quid but it's cheap compared to getting it wrong.

[Dan@OrangeGenie]

Hi,
I'm the sole employee of my limited company. I've stopped trading as I've gone down the permanent employee route (thanks IR35), my company had been going for around 18 months and is solvent.

In the company accounts I have around £20k in assets. My new job's permanent salary puts me in the higher rate tax bracket for dividends of 32.5%. In this tax year, the company has generated a small amount of revenue (around £500) with a few hundred pounds worth of expenses.

I believe any money left in the account goes to the crown when closed, so I need to take as much of it out as I'm allowed.

What I'm not sure about is how much money I can take out of the company account before closing? Would it be:

revenue (£500) - costs (£300) =£200 profit, taxable at 20% (£40)

Dividend to myself = £19,960 (20k - tax liability)
Personal tax return on which I'll need to pay as a director = £6,487

?

Advice appreciated...

Speak to your accountant about capital gains taxes. You'll find all sorts of tax breaks this way. Will stress though, speak to an accountant. We have plenty here by the way....