MVL, entrepreneur tax relief and dividends

[northernladuk]

Just paying him doesn't make him an employee by the way. If he was an employee you'd have to pay him NMW (unless he's a director of course) Just being pedantic

[katdan]

Thanks to both Maslins & northernladuk.

@Maslins, I guess I have no choice but to deal with my accountant eventually even if I have to pay for extra fees in additional to my monthly accountant fee :-(

[rickyrick]

When I closed my company down few years ago, the process started in January, the first CGT distribution was in one tax year and final distribution in the next year, this was not planned.

I contacted HMRC on how to complete the self assessment, CGT allowance could be used for both years. I claimed both ER & CGT for payments spanning two tax years without any comeback from HMRC.

Hi Eazy

I am doing exactly this at the moment, but when I called HMRC and ran through their IVR, it ended the call saying they cannot take calls at the moment.

Is there any info you can share with guidance on filling in the self assessment?

Kind regards

Richard

[sira]

I'm looking into choosing an MVL service at the moment.

I noticed that the time-frames vary wildy between providers; some can fully distribute the cash in 2-4 weeks and others mention that it takes 3-4 months (such as MVLonline).

Can anyone shed light on why this is?

[Maslins]

I can't speak for other providers. However, MVL Online goes through the normal liquidation best practices re this.

This includes:
- getting your company's bank to transfer funds to an estate account set up specifically for your case, rather than ask you to do so. This is why it's often about a month between appointment and first distribution.
- obtaining written clearance from HMRC that your company has met all its corporation tax/VAT/PAYE obligations. This is why it's currently often 4-6 months (painfully even slower for some cases at the moment due to Covid-19) until you get the balance.

Doing both the above minimises risk for you. No risk of you inadvertently sending funds to a scammer, or fat finger typo sending funds astray, where you'd have no protection due to you voluntarily instigating it yourself. No risk of HMRC raising a legitimate claim after the liquidator pays out funds, forcing the liquidator to invoke the indemnity you'd no doubt have signed, pursuing you for money back, and charging you for the privilege.

It does make it seem painfully slow unfortunately, as we rely on third parties actioning our requests. However, having discussed alternatives internally, we personally don't think they're viable due to the increased risks imposed on both liquidator and client.

[sira]

I can't speak for other providers. However, MVL Online goes through the normal liquidation best practices re this.

This includes:
- getting your company's bank to transfer funds to an estate account set up specifically for your case, rather than ask you to do so. This is why it's often about a month between appointment and first distribution.
- obtaining written clearance from HMRC that your company has met all its corporation tax/VAT/PAYE obligations. This is why it's currently often 4-6 months (painfully even slower for some cases at the moment due to Covid-19) until you get the balance.

Doing both the above minimises risk for you. No risk of you inadvertently sending funds to a scammer, or fat finger typo sending funds astray, where you'd have no protection due to you voluntarily instigating it yourself. No risk of HMRC raising a legitimate claim after the liquidator pays out funds, forcing the liquidator to invoke the indemnity you'd no doubt have signed, pursuing you for money back, and charging you for the privilege.

It does make it seem painfully slow unfortunately, as we rely on third parties actioning our requests. However, having discussed alternatives internally, we personally don't think they're viable due to the increased risks imposed on both liquidator and client.

Thanks for the detailed input, very helpful.

I guess this raises one question - why is it more risky to sign a shareholders indemnity and receive the money almost immediately? As I have a very simple Ltd. and wouldn't expect HMRC to raise any claims.

[Maslins]

I guess this raises one question - why is it more risky to sign a shareholders indemnity and receive the money almost immediately? As I have a very simple Ltd. and wouldn't expect HMRC to raise any claims.

I feel my post above answers this. In practice, assuming you have taken and continue to take reasonable care, and the liquidator is legitimate, you should be fine. It's only if things were to go wrong somewhere along the lines you could be in a pickle.

[kookachoo]

Thanks for the detailed input, very helpful.

I guess this raises one question - why is it more risky to sign a shareholders indemnity and receive the money almost immediately? As I have a very simple Ltd. and wouldn't expect HMRC to raise any claims.

Just follow what most people on this forum will tell you, including myself. Just pay the fee and appoint MVLOnline and don’t look back. This requires the hands of a professional and I was more than happy with their service.