Dissolving a company – tax implications

[level]

I'm the secretary for a 2 person IT consultancy company. One of the directors is going permanent. The other director is thinking of waiting until the end of his current contract before dissolving the company and starting up a new one with someone with a similar skills set. The main issue is how to get the money out of the company in the most tax efficient way. Over the 5 years the company has been around nearly £200,000 has built up in the company account. So...
1. What is the most tax efficient way of getting the money out? I've read about Extra Statutory Concession C16. This seems too good to be true - If you can treat the cash in the company as capital and claim 75% taper relief this seems like a massive saving vs taking the lot as dividends.
2. If this is the best way to go, what is the timing for the procedure?

The cash in the company is pretty much all retained profit. The company has no tangible assets.

Many thanks

[Sockpuppet]

I'd speakto an accountant with that kind of cash floating around.

[level]

Our current accountant isn't very good. I had to tell her about C16. I'm thinking it might be a bit too much trouble to get a new accountant just to close down the company.

I'm happy to give it a go myself if people can point me in the right direction. I'm a solicitor... not tax, but I'm happy to look into these matters.

[malvolio]

SJD describe a company closure process as one of the alternatives solutions to saving tax. Perhaps you could drop SJD an email. There are some pitfalls you would like to avoid. (And to be fair, no doubt Nixon Williams and Darren could answer the question)

As an aside, why do people use accountants that can't answer basic questions (well, basic for accountants, anyway)? Its like using a dentist that can't do fillings.

[ASB]

Our current accountant isn't very good. I had to tell her about C16. I'm thinking it might be a bit too much trouble to get a new accountant just to close down the company.

I'm happy to give it a go myself if people can point me in the right direction. I'm a solicitor... not tax, but I'm happy to look into these matters.

If you search for it you should find it, I seem to remember I posted up how I did it. Make BLOODY sure get everything inm the right order though. Get the case out of the accounts before dissolution or you are well stuffed.

[level]

Too busy to change!
We've been meaning to get rid of her for a while. We'll get a new accountant when we start the new company.

[level]

What case is that ASB?

[ASB]

What case is that ASB?

Keyboard playing up again. Cash was the word.

I had no problems, wrote to tax office say "can I have it" basically. The HMRC website give details of the undertakings you need to give (basically to pay outstanding CT and get the company struck off and ensure the cash iis declared on the sdhareholders personal tax returns and any relevant CGT paid.

Good luck.

[level]

Thanks for this... I'll have another look in the forum. Already found some stuff but there seems to be a real lack of info on the internet as a whole.

Did you get the 75% taper relief? Is this really as good as it looks? It's not that usual for HMRC to give contractors a break.

[ASB]

Thanks for this... I'll have another look in the forum. Already found some stuff but there seems to be a real lack of info on the internet as a whole.

Did you get the 75% taper relief? Is this really as good as it looks? It's not that usual for HMRC to give contractors a break.

Yes, trouble with searching is ESC and C16 are too short. But, I turned up http://forums.contractoruk.com/threa...oncession.html

and

http://forums.contractoruk.com/threa...oncession.html

This might help with the wording

http://forums.contractoruk.com/threa...inding-up.html

I recall posting up the text of the letter I used, but it was pretty much the same as the others and I cant find it again.