MVL best option for me?

[GummiBear]

Hi Folks,

After 4.5 yrs with one client my contract has come to an end with no further renewals.

I know the regulars will see this as a red flag and being very much in the danger zone.

As a result, is the best course of action for me, is to close down the company via MVL (reserves > £25k), get a permie job for 2 years and if I can get an outside gig after 2 yrs, start up again?

Thanks.

[northernladuk]

Why go perm? Why not just go inside via brolly?

[MrButton]

How much reserves? As it could be better to wait till it’s below 25k and strike off. But if it’s 40k+ it’s probably worth it.

Maybe see if there’s anything in March 3rd budget to guide you in one or another direction.

[Paralytic]

How much reserves? As it could be better to wait till it’s below 25k and strike off. But if it’s 40k+ it’s probably worth it.

Or... if if is £40K+ but you can pay dividends at the 7.5% rate to bring it under £25K...

[GummiBear]

Why go perm? Why not just go inside via brolly?

Yes, either Perm or Brolly - both are highly taxed options - if you end up with the same net salary on a Brolly as a Perm - Perm prob better option due to benefits.

How much reserves? As it could be better to wait till it’s below 25k and strike off. But if it’s 40k+ it’s probably worth it.

Maybe see if there’s anything in March 3rd budget to guide you in one or another direction.

Reserves are quite substantial - a few hundred K
I need to look at what tax efficient options I have - perhaps before MVL - I should transfer some funds to a SIPP (only set one up a year ago but yet to transfer anything into it) - my company year end was Dec 2020 - does anyone know if you need to transfer to SIPP before the company year end or you can do it after and still reduce your corp tax liability. My accountant doesn't appear to be clued up on SIPP contributions reducing corp tax - which doesn't fulfill me with much confidence.

Or... if if is £40K+ but you can pay dividends at the 7.5% rate to bring it under £25K...

I made the mistake of not taking out large dividends as the years went by and left most of it to accumulate. I was contemplating setting up a SPV and doing BTL - however, I think with this I still need the original company - which might be a liability.

[eek]

Given the new information - MVL the company and go permie or via an umbrella until things settle down.

It makes zero sense doing anything else if you can extract £x,000 - 10%, even putting it into your pension makes little sense.

[GummiBear]

Given the new information - MVL the company and go permie or via an umbrella until things settle down.

It makes zero sense doing anything else if you can extract £x,000 - 10%, even putting it into your pension makes little sense.

I was thinking whatever I can put into the SIPP pension - that would at least reduce my corp tax liability and save on the 10% capital gains liability.

Once extracted, I would be looking to invest the proceeds - so may as well be in a SIPP - just buy some dividend yielding stocks or funds etc.