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MVL before 3rd Mar 2021

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  • Maslins
    replied
    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).

    Leave a comment:


  • northernladuk
    replied
    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?

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  • NoviceContractor
    replied
    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?

    Leave a comment:


  • Lockhouse
    replied
    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.

    Leave a comment:


  • northernladuk
    replied
    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.

    Leave a comment:


  • ChimpMaster
    replied
    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.

    Leave a comment:


  • Maslins
    replied
    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.

    Leave a comment:


  • NoviceContractor
    replied
    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.

    Leave a comment:


  • eek
    replied
    Originally posted by cojak View Post
    This the way liquidation works. Once hired you have to trust your liquidator.

    Regarding Maslins, the more quickly you want your money out, the more expensive its going to be.

    If you want cash and doing it quickly (both more involved and therefore more expensive) you need to go to someone like Begbies Traynor (or your liquidator).
    Equally if you want the money now you can't wait for the liquidator to take control of your bank account and receive the money from your bank - that takes time you are not willing to waste.

    Hence you only choice is to do what the liquidator says which is transfer the money now so they can pay it to you otherwise your time scales are dependent on third parties even the liquidator has zero control over see MVL: Metro Bank not releasing my funds for 2 months (contractoruk.com)

    Leave a comment:


  • ladymuck
    replied
    Originally posted by cojak View Post
    *sucks teeth*

    Ooh, I wouldn't rely on that assumption LM, not in these cash-strapped times...
    I'm just one of life's naive rose-tinted types

    Leave a comment:

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