How to Close Down My Ltd

[MikhailCompo]

So my FTSE250 client offered me a decent package to convert to permie as they're binning all contractors before Feb 2020, so I have taken the plunge.

Can anyone clarify the following points for me? I have been told that if i am over 25k then i must appoint and pay for a liquidator

1) Does this threshold include assets? (I bought a printer, a scanner, laptop and a high spec PC last year)
2) Is there a way to write off assets value?
3) Can I simply pay a large dividend to bring me under the 25k threshold?
4) ...Is it a bad idea to buy a decent office chair (£500 ish) right before I close the business?! Mine is shagged and i should have replaced it ages ago.

As always, any advice very much appreciated.

Thanks.

[wattaj]

So my FTSE250 client offered me a decent package to convert to permie as they're binning all contractors before Feb 2020, so I have taken the plunge.

Can anyone clarify the following points for me? I have been told that if i am over 25k then i must appoint and pay for a liquidator

1) Does this threshold include assets? (I bought a printer, a scanner, laptop and a high spec PC last year)
2) Is there a way to write off assets value?
3) Can I simply pay a large dividend to bring me under the 25k threshold?
4) ...Is it a bad idea to buy a decent office chair (£500 ish) right before I close the business?! Mine is shagged and i should have replaced it ages ago.

As always, any advice very much appreciated.

Thanks.

[NLUK] What did your accountant say? [/NLUK]

[BrilloPad]

As long as you are going permie for more than 2 years, use dividends to get yourself down to £11,200 per director which can be taken as capital gains. I expect no-one will care about the assets. Don't buy anything else - its that sort of thing that can get you into big trouble.

Not quite sure why you are not asking your accountant about this? To be fair, I suppose NLUK loves answering this sort of stuff....

[wattaj]

Pension contributions may be more tax efficient for you in order to get below the £25k limit.

All "assets" will have a book value and are likely to have depreciated to next to nothing three years after purchase. Your accountant will be able to provide this book value if you do need to buy anything out of the company before closure... though you may be just as likely to write it all off and keep them.

[MikhailCompo]

[NLUK] What did your accountant say? [/NLUK]

Standard email after standard email, sent be an account manager, I never communicate with a qualified accountant, NONE of the emails have addressed my specific questions.

If i complain on social media, then they seem to notice me, I look forward to never having to deal with them again.

[MikhailCompo]

As long as you are going permie for more than 2 years

Why do you say 2 years. Is that a financial consideration regarding my company or tax/entrepreneurs relief related?

[BrilloPad]

Why do you say 2 years. Is that a financial consideration regarding my company or tax/entrepreneurs relief related?

Because of phoenixing rules. If you contract again within 2 years then HMRC can claim you are just using CGT as didguised renumeration. It used to be quite a good thing, close limited and re-open every 3 years or so.

[Fred Bloggs]

Because of phoenixing rules. If you contract again within 2 years then HMRC can claim you are just using CGT as didguised renumeration. It used to be quite a good thing, close limited and re-open every 3 years or so.

What BP says +1. In fact regarding the wrap up and start again every three years model, some of us can still remember when SJD's website used to advertise/promote that as a tax efficient benefit of incorporation. They had the diferent scenarios illustrated in their website blurb. How times have changed.

[Maslins]

I have been told that if i am over 25k then i must appoint and pay for a liquidator

1) Does this threshold include assets? (I bought a printer, a scanner, laptop and a high spec PC last year)
2) Is there a way to write off assets value?
3) Can I simply pay a large dividend to bring me under the 25k threshold?
4) ...Is it a bad idea to buy a decent office chair (£500 ish) right before I close the business?! Mine is shagged and i should have replaced it ages ago.

1) Yes. It would be the company's final net asset position that's critical. This will include all assets, so fixed ones (like the things you mention), as well as cash at bank, and any possible debtors, but then deducting any liabilities.
2) Yes...but would need to be reasonable. Eg if you bought a £2k laptop a month ago which you want to keep privately going forwards, then writing it off at this stage would not be reasonable.
3) Yes, though that will have personal tax consequences. If you're at £26k net assets, this may well be a good idea. If you're at £100k net assets, it probably isn't.
4) Short answer - don't do it.

[MikhailCompo]

1) Yes. It would be the company's final net asset position that's critical. This will include all assets, so fixed ones (like the things you mention), as well as cash at bank, and any possible debtors, but then deducting any liabilities.
2) Yes...but would need to be reasonable. Eg if you bought a £2k laptop a month ago which you want to keep privately going forwards, then writing it off at this stage would not be reasonable.
3) Yes, though that will have personal tax consequences. If you're at £26k net assets, this may well be a good idea. If you're at £100k net assets, it probably isn't.
4) Short answer - don't do it.

2) I got the laptop in April but some types of IT kit appear to be written off after a year and other things three years judging by my accountants software. What/where are the rules on writing off assets?
3) Significantly nearer 26k!!!
4) Doh!

Thanks, really helpful. How much do you change for company closures?