Contracting company wind up questions

[Moose73]

So,I have a 1 man contracting company that I set up a couple of years ago, which I am still using on an outside ir35 basis for now. With changes coming in April I am looking at options now, as I work in the nuclear sector, if anything to go by last years ore ir35 changes which ultimately were delayed, all the sector were going to blanket ban psc’ s and force them either into paye/umbrella or leave. This was mainly being done by clients making determinations with the outcome they want not to take on the risk, and also clients not accepting outside 35 for any of their roles.

So here we are now 2 months to go till most likely the same situation. I have my accountant saying I should keep the company in case I get a outside 35 contract later, but not likely in the sector, of course they want paying monthly to keep things ticking over. So my question is say I go umbrella then there will be no income into the company, so things like account fees, insurances all still need to be paid, but will come from the tax money remaining so is not sustainable.

The accountant wants £699 plus vat to wind the company via mvl, but assumes their is profit in the company, which although all corporation tax and vat is up to date and no other debts, there is no accounts done for this financial year yet, and so I don’t know what is still left to pay next December. I’m thinking it may be 1 or 2k short if stopped trading end of match, which I will not be able to recover by trading beyond.

Not sure what to do next?

[northernladuk]

Wait and see. Accountants often do reduced charges for non trading companies. You only need insurances for the rest of year and I imagine you've already got them so no really biggie leaving the company open.

And in the meantime get your business accounts in order and make sure you aren't trading insolvent. Your dividends will be illegal for a start.

[jamesbrown]

You don't need an MVL unless the net assets exceed 25k. For anything less, a straightforward strike off is sufficient.

[Lance]

What you say about the nuclear sector all going inside is wrong.
For a start it’s got a large amount of public sector which isn’t going to change in April.

Although there are a huge amount of permitractors taking the piss.

[Pragmatist]

So,I have a 1 man contracting company that I set up a couple of years ago, which I am still using on an outside ir35 basis for now. With changes coming in April I am looking at options now, as I work in the nuclear sector, if anything to go by last years ore ir35 changes which ultimately were delayed, all the sector were going to blanket ban psc’ s and force them either into paye/umbrella or leave. This was mainly being done by clients making determinations with the outcome they want not to take on the risk, and also clients not accepting outside 35 for any of their roles.

Looking at Find fairer IR35 & CV19 clients, agents & brollys. OffPayroll.org.uk, that mostly seems to be the case although Urenco is a recent exception.

£699 is a fraction of what I was quoted to wind up.

[Maslins]

So here we are now 2 months to go till most likely the same situation. I have my accountant saying I should keep the company in case I get a outside 35 contract later, but not likely in the sector, of course they want paying monthly to keep things ticking over. So my question is say I go umbrella then there will be no income into the company, so things like account fees, insurances all still need to be paid, but will come from the tax money remaining so is not sustainable.

The accountant wants £699 plus vat to wind the company via mvl, but assumes their is profit in the company, which although all corporation tax and vat is up to date and no other debts, there is no accounts done for this financial year yet, and so I don’t know what is still left to pay next December. I’m thinking it may be 1 or 2k short if stopped trading end of match, which I will not be able to recover by trading beyond.

Not sure what to do next?

Guessing for the bit I've bolded this would be a strike off (not an MVL). If final net assets are sub £25k, as I'm guessing will be the case from your comments, then an MVL rarely makes sense. The accountant is therefore really just charging to tidy up final affairs, and £699 is (IMHO) a bit cheeky if it's on top/independent of a monthly fee you've been paying them all along, or is good value if you're not paying regularly. If it also included an actual MVL, then it's a mega bargain!

Re keeping the company ticking over, I'm guessing we're talking perhaps a few months, rather than long term? If so, I'd agree that makes sense. Hopefully things will be a little clearer by (say) May, in terms of what will/won't be available contract-wise, re both Covid and IR35.

If you use something like FreeAgent, you should have a good idea what your retained profit position is at any given time. From your final few sentences, sounds like you have some cash in the bank, but are unsure if it'll be enough to settle final company tax liabilities? If your bookkeeping software can't help with that, hopefully your accountant can.