MVL - is it really the best route for all?

[DitchTheBox]

Hi Folks,

I know this is a topic that comes up a lot on the group, but has anyone chosen to strike off rather than MVL with well over 25K in the bank, and why?

The total difference in tax will be about 2.5K max for me (projected by my accountant) and I've been debating over which route to take. In terms of the future probably most of my gigs will be inside still for a while, or I may change direction entirely and have to take a take home hit anyway for a while - I'm really not happy staying in the field I am but will take the money where I can in the current climate.

Looking at MVL the declaration of solvency and Gazette postings tend to list the directors private address as a trading address (really not keen on this for personal privacy/safety reasons). I've been assured that a directors private address can stay off of the public docs by an MVL company. This is more important than a couple of thousand to me in all honesty.

Does anyone have any further insights or personal experience with this? Would be good to hear director experiences or accountant advice. Thanks in advance.

[Lance]

It's stupid idea to strike off like that IMO.

At least take dividends out first then strike off at below £25k. Why would you voluntarily pay NICS and more income tax than you need to?
Or pay pension to get the figure down.

If you do a search this suggestion has been made to various people. So to answer your question directly - No. MVL isn't the best route for all and anyone who says so is plain wrong.

[DitchTheBox]

Thanks Lance. Yes I mean take dividends to just below 25K and then strike off, not take the lot as dividends - yes, that would be totally illogical. It was more that vs the MVL, for the reasons I mentioned.

[Maslins]

The total difference in tax will be about 2.5K max for me (projected by my accountant) and I've been debating over which route to take. In terms of the future probably most of my gigs will be inside still for a while, or I may change direction entirely and have to take a take home hit anyway for a while - I'm really not happy staying in the field I am but will take the money where I can in the current climate.

From your follow up comment, I'm guessing the situation is (very roughly, obviously I don't know the numbers):
- company has say £40k final net assets
- you take dividends of £16k, to leave £24k
- strike off, argument being final net assets sub £25k hence can get CGT treatment?
Whilst in practice you probably would "get away with" this, do be careful. Assuming you've already ceased trading, it shouldn't be a choice for you to decide that the £16k you take today is a dividend in normal course of business and £24k you take tomorrow is final withdrawal as part of closing down. You're unlikely to get challenged on the point...but if you did, ceased trading some time ago, then do £16k and £24k withdrawals soon after each other, I imagine HMRC would have an easy job of arguing that's you taking out £40k as part of closing via strike off, hence >£25k, hence all taxable as dividends, no CGT.

Looking at MVL the declaration of solvency and Gazette postings tend to list the directors private address as a trading address (really not keen on this for personal privacy/safety reasons). I've been assured that a directors private address can stay off of the public docs by an MVL company. This is more important than a couple of thousand to me in all honesty.

It's generally the registered office address that appears on all they key paperwork. If that's your home address, then yes, your home address would appear on these docs...but it would be public anyway by virtue of being registered office address pre liquidation. If registered office address is your accountant's address/similar, then that would be what shows, home address remains private.

[DitchTheBox]

Thanks Maslins. Yes I'm using the accountants address. So that would appear on the solvency declaration? And what about the Gazette posts - they list trading address which seems to be filled out with most people's home address rather than the registered office. In one case I did see 'N/A' listed.

Thanks very much for your response and the advice. It will definitely help me, and hopefully anyone else who has a similar query.

[Maslins]

Thanks Maslins. Yes I'm using the accountants address. So that would appear on the solvency declaration? And what about the Gazette posts - they list trading address which seems to be filled out with most people's home address rather than the registered office. In one case I did see 'N/A' listed.

Our sister company (MVL Online) it'd be the registered office address that was printed on all those (declaration and gazette notices).

The declaration will separately need hand written on it (or "stamped") the address where it was sworn. Often that would be the address of the solicitor who swore it...but I guess if you did get it sworn at your home address, that would be the address you should write on it, and that would then become public.

[DitchTheBox]

Just to say thanks to everyone again for the responses - the MVL company did in fact manage to keep my private address off of all public docs. Incase anyone else in a similar position is reading at any point and wondering what the conclusion was.

[Funhouse]

Hi DitchTheBox

Out of interest, who did you use for your MVL? I may be considering the same and wondered if you would recommend who you used.
Thanks is advance.