MVL - HMRC Clearance

[jsw0991]

Also experienced the same in regards to long lead times with HMRC giving clearance, year + now.

Does anyone know the complications of starting another limited company in a similar domain, after MVL? I know there's a two year period in relation to TAAR, of which I understand the beginning of that two year period to be when the final distribution has been made, which in my case, was about a year after I started the MVL process, so would, in turn, result in about 3 years all in after deciding to stop trading and taking a permanent role, which is a bit annoying?!

[Lance]

Also experienced the same in regards to long lead times with HMRC giving clearance, year + now.

Does anyone know the complications of starting another limited company in a similar domain, after MVL? I know there's a two year period in relation to TAAR, of which I understand the beginning of that two year period to be when the final distribution has been made, which in my case, was about a year after I started the MVL process, so would, in turn, result in about 3 years all in after deciding to stop trading and taking a permanent role, which is a bit annoying?!

assuming you get caught by HMRC.....

Best case is that you have to pay tax on your distribution as if it was dividends rather than capital. Plus late payment penalties.

Worst case..... It's unlikely you'll go to prison if it's not done fraudulently. But deliberately starting a new company in the same trade, when you know what TAAR is, but hoping they don't find out is probably evasion, and possibly could be fraud.

[northernladuk]

assuming you get caught by HMRC.....

Which you'd think will happen as everything is electronic. You'll be flagged for MVL and another company pops up registered to you will not be hard to spot. Remember companies house also list the directors and the companys they are linked to so the new one will appear right underneath the old one. Not like it's unconnected or hidden or anything.

Best case is that you have to pay tax on your distribution as if it was dividends rather than capital. Plus late payment penalties.

I could be wrong but penalties can be up to 100% of tax owed, possibility of a fine and also interest on the all the monies owed dating back to when you first earned it. In the worst case this could be way more than just the figure you owed.

Worst case..... It's unlikely you'll go to prison if it's not done fraudulently. But deliberately starting a new company in the same trade, when you know what TAAR is, but hoping they don't find out is probably evasion, and possibly could be fraud.

I assume also that being accused of that will also get you struck off from being a director so effectively ending any chances of going LTD going forward.

[Lance]

Which you'd think will happen as everything is electronic. You'll be flagged for MVL and another company pops up registered to you will not be hard to spot. Remember companies house also list the directors and the companys they are linked to so the new one will appear right underneath the old one. Not like it's unconnected or hidden or anything.

I could be wrong but penalties can be up to 100% of tax owed, possibility of a fine and also interest on the all the monies owed dating back to when you first earned it. In the worst case this could be way more than just the figure you owed.

I assume also that being accused of that will also get you struck off from being a director so effectively ending any chances of going LTD going forward.

it's basically a terrible idea to MVL when the only reason for it is due to slightly challenging market conditions.

[northernladuk]

it's basically a terrible idea to MVL when the only reason for it is due to slightly challenging market conditions.

Yeah. We've already had a few posts from people that MVL'd and got an outside gig a few months later and there is nothing they can do about it and I suspect that's just the start as it's still early days.

[Sonicboom]

The HMRC clearance liquidators seek purely relates to company tax liabilities. I think sometimes clients get confused thinking it's approval for the distributions to qualify as capital gains, or BADR/similar, it's not. The distributions will be taxable based on date they're declared, irrespective of liquidator HMRC clearance.

Finalising without HMRC clearance basically means paying out final funds to the client without having written confirmation from HMRC that they're happy the client company's affairs are paid up in full. There isn't really a deadline for HMRC to lodge a claim unfortunately. Equally it's best practice to wait for full HMRC clearance before finalising a case.

However...in the current circumstances this simply isn't viable in our opinion. MVL Online currently typically wait 6-9 months (depending upon whether we've got anything partially comforting from HMRC), then are finalising. We don't feel that's particularly aggressive. It gives HMRC a significant window in which to lodge a claim, plus we'll write to them at least a couple of times re each case, independent of the publicly visible adverts that get placed in the Gazette, before finalising. It sounds like Clarke Bell have gone for a more cautious approach, choosing to delay further. No right/wrong answer, and as above we're aware our route goes against best practice...but to use a phrase that's been massively over-used these last ~16 months, we are in unprecedented times!

Maslins Sorry to hijack this thread. So you are saying regardless of the status of the liquidation, as long as the funds have been distributed to me I can claim BDAR (ER) and continue to wait for HMRC to sign off which only effects my company tax position?

[Lance]

Maslins Sorry to hijack this thread. So you are saying regardless of the status of the liquidation, as long as the funds have been distributed to me I can claim BDAR (ER) and continue to wait for HMRC to sign off which only effects my company tax position?

BADR!!!!

[Maslins]

Maslins Sorry to hijack this thread. So you are saying regardless of the status of the liquidation, as long as the funds have been distributed to me I can claim BDAR (ER) and continue to wait for HMRC to sign off which only effects my company tax position?

The HMRC clearance liquidators generally apply for has nothing to do with personal tax. The distributions will be taxable on you personally based on date of distribution, irrespective of whether the liquidation has finalised.

[oleanderwand]

Maslins how does HMRC provide clearance in MVL, if you don't mind me asking? Do they send it as 1 clearance for all taxes/paye or does the liquidator have to request (and subsequently will receive) separate clearance for each category? I am planning to MVL my Ltd, have read the information on this website and forum (what a fountain of knowledge!), but I am still unclear regarding the clearance. Sorry if I jump in to this thread, I am newbie here but thought it is better to post in this relevant thread instead of opening a new one. Thanks in advance.

[Lance]

thin out the herd