Going permie and limited co. implications

[BillHicksRIP]

If I was to turn to the dark side and go permie, what would the implications be to the my ltd? It's been running less than a year, but something's come up that I'm interested in on the permie front. Would/Should I wind it up and what would the implications of that be?

Thanks in advance.

[Bluebird]

you could wind up or else leave as dormant - think you'd still have to submit 'nil' annual returns to Co Hse.

[howdydoody]

Check out taper relief for legitimate tax saving

I read somewhere there is a ruling that allows you to wind up your company and distribute the remaining capital but only pay tax on 75%.

You must have been trading for 3 years, so if you have a lot of capital tied up, then run it dormant until your 3 year anniversary and then shut it down and save a bundle of tax.

I ave added this as a new post with the words Taper Relief in the title to see if anyone else has something solid to add.

[howdydoody]

Make that 75%, not 25%

My previous post had an error. My notes remind me that the relief is 75%, which means you pay tax only on the remaining 25%, so if you have say £100K in capital, you pay tax at your prevailing rate on £25,000.

In an extreme case you would pay 22% of £25K = £6,250 instead of 40% of £100K, so you therefore save £33,750.

Please check this out and do not rely on this post for tax advice. I have not been able to verify this on the Inland Revenue website yet.

[BillHicksRIP]

Thanks for bumping the taper relief issue. I will go through all the finer details with my accountant should I do decide to bail. Looking into it, making the company dormant would be best in case I wanted to contract again further down the line. If it was dormant, then the money in the non-interest bank account would just have to sit there I take it?

[howdydoody]

Dormant Company

Dormant means non-trading, but does not mean the company cannot earn interest on its reserves.

You can hold the funds in an interest bearing account but declare the interest as 'Other Income'. You pay Corporation Tax on this of course at the new rate of 20% from next week.

[Robwg]

WOuldn't he have to still submit yearly accounts though - costs whatever it costs an accountant to do this?

[Bluebird]

WOuldn't he have to still submit yearly accounts though - costs whatever it costs an accountant to do this?

yep.

£30

[PAH]

You can submit very simple abbreviated accounts, which amount to 1 page iirc. Examples of these abbreviated accounts are on the web to see if you think it's worth doing yourself rather than paying an accountant.