• Visitors can check out the Forum FAQ by clicking this link. You have to register before you can post: click the REGISTER link above to proceed. To start viewing messages, select the forum that you want to visit from the selection below. View our Forum Privacy Policy.
  • Want to receive the latest contracting news and advice straight to your inbox? Sign up to the ContractorUK newsletter here. Every sign up will also be entered into a draw to WIN £100 Amazon vouchers!

MVL before 3rd Mar 2021

Collapse
X
  •  
  • Filter
  • Time
  • Show
Clear All
new posts

    #11
    Originally posted by ladymuck View Post
    True. Not a piece of legislation that was ever going to impact me so I didn't pay it much attention.

    You must have huge amounts of cash in your company if you're worried about CGT to the extent that you're willing to pay a lot of money to wind up within 7 days on a hunch. How up to date are your pension contributions?
    I have 200K so need to be quick else the CGT would be huge. And if CGT is aligned to personal tax rates then it would be killing not to pay couple of thousand now to save huge tax liability.
    My accounts would be done by middle of next week so would have few days before budget to appoint the liquidator and start the process. Would love to work with Maslins if he allows me to transfer cash to him right after he is appointed and if he can release cash to me immediately.

    Comment


      #12
      We're aware some liquidator firms get the shareholders to process a transfer around the time of their appointment. From a very practical perspective, assuming you proceed carefully, this should be fine.

      Do ensure you do your proper due diligence on the firm in question. Ie are you happy they're not just some random scammer trying to get you to voluntarily send all the company's funds to them. Realistically the bank would have no sympathy if that were the case.

      Also quadruple check the bank details you're sending funds to. Again, if you make a cock up and the liquidator never gets the funds, neither the liquidator nor the bank are likely to accept responsibility.

      From a geeky legal perspective, if you're transferring funds before the liquidator is appointed, then even assuming they are entirely legit, the bond won't yet be in place to protect your funds (though this may just be the case for a day or so assuming you appoint them immediately after). Also once you have appointed them, legally you don't control the company anymore, so shouldn't be able to make payments from the company bank anymore. However assuming it's with direct authority/instruction from the liquidator, this should be fine.

      It is something we're getting asked about more and more, so I'm not saying it's something we won't ever do. However, the key thing about allowing normal practices to run their course is that the bank processes the transfer request, not you. The bank will therefore be responsible if they hypothetically were to send money to the wrong place, or the "liquidator" wasn't actually a liquidator at all, but a scammer. Yes they can sometimes be slow, and part of that is because some of the banks are rubbish...but it's also because they'll be doing various sanity checks to ensure it's all legit.

      In terms of possible imminent tax changes, yeah, who knows what may change or exactly when from. MVL Online are offering to do the first distribution paperwork for all cases where they're at least appointed as liquidators pre budget, even where they don't have the funds. This doesn't help the client get the physical cash any quicker, but it should "lock in" current tax rules/rates for that first distribution.

      Comment


        #13
        I have no idea how the insolvency firm will manage to distribute so quickly. They need lots of info from you, not least the final (cessation) accounts, CT600, Final VAT Return etc. If you already have that in place then there is a chance.

        I am using Frost Group who distribute by way of shareholder loans, which means that the funds are always in your control. BTW this method is acceptable under HMRC guidelines. I wrote a long post about it some time ago on this forum.

        Frost aren't taking on any new clients but maybe you can discuss this method with your liquidator. Assuming of course that you have all the final accounts etc already done, else the company can't be placed into liquidation anyway.

        Comment


          #14
          My Ltd has me and my wife as share holder of class A and class B type shares (equal shareholding).
          Yuk. Alphabet share set up. Why does 'equal shareholding' make a difference when the two classes are difference value and voting rights?
          Last edited by northernladuk; 19 February 2021, 10:27.
          'CUK forum personality of 2011 - Winner - Yes really!!!!

          Comment


            #15
            Surely there would be some notice for the 10% MVL rate changing on March 3rd? I'm currently just about to MVL and expect to get the first payment this tax year. It would be really poor form for the change to be introduced immediately as many people would already have started the process.
            ...my quagmire of greed....my cesspit of laziness and unfairness....all I am doing is sticking two fingers up at nurses, doctors and other hard working employed professionals...

            Comment


              #16
              Originally posted by Maslins View Post
              We're aware some liquidator firms get the shareholders to process a transfer around the time of their appointment. From a very practical perspective, assuming you proceed carefully, this should be fine.

              Do ensure you do your proper due diligence on the firm in question. Ie are you happy they're not just some random scammer trying to get you to voluntarily send all the company's funds to them. Realistically the bank would have no sympathy if that were the case.

              Also quadruple check the bank details you're sending funds to. Again, if you make a cock up and the liquidator never gets the funds, neither the liquidator nor the bank are likely to accept responsibility.

              From a geeky legal perspective, if you're transferring funds before the liquidator is appointed, then even assuming they are entirely legit, the bond won't yet be in place to protect your funds (though this may just be the case for a day or so assuming you appoint them immediately after). Also once you have appointed them, legally you don't control the company anymore, so shouldn't be able to make payments from the company bank anymore. However assuming it's with direct authority/instruction from the liquidator, this should be fine.

              It is something we're getting asked about more and more, so I'm not saying it's something we won't ever do. However, the key thing about allowing normal practices to run their course is that the bank processes the transfer request, not you. The bank will therefore be responsible if they hypothetically were to send money to the wrong place, or the "liquidator" wasn't actually a liquidator at all, but a scammer. Yes they can sometimes be slow, and part of that is because some of the banks are rubbish...but it's also because they'll be doing various sanity checks to ensure it's all legit.

              In terms of possible imminent tax changes, yeah, who knows what may change or exactly when from. MVL Online are offering to do the first distribution paperwork for all cases where they're at least appointed as liquidators pre budget, even where they don't have the funds. This doesn't help the client get the physical cash any quicker, but it should "lock in" current tax rules/rates for that first distribution.
              Is it correct that tax rules are applicable based on distribution paperwork and not actual cash distribution?

              Comment


                #17
                Originally posted by Lockhouse View Post
                Surely there would be some notice for the 10% MVL rate changing on March 3rd? I'm currently just about to MVL and expect to get the first payment this tax year. It would be really poor form for the change to be introduced immediately as many people would already have started the process.
                If they do that everyone will rush to claim it before so negating any savings and potentially pushing people to be less than honest to manipulate a situation in order to get the benefit before it goes? Maybe impose it but a very short timescale for it to kick in. Just long enough to allow current people in the process to finish but not long enough to let everyone jump on the bandwagon before it kicks in?
                'CUK forum personality of 2011 - Winner - Yes really!!!!

                Comment


                  #18
                  Originally posted by NoviceContractor View Post
                  Is it correct that tax rules are applicable based on distribution paperwork and not actual cash distribution?
                  I think most accountants are agreed "yes". Similar to declaring a dividend but not taking the cash immediately, which is a reasonably common thing to do, especially perhaps late March/first few days of April if you want to use up your basic rate band/similar but don't need the cash (or possibly company doesn't have the cash, but is solvent due to other assets).

                  Comment

                  Working...
                  X