closing with 2 years?

[welshman213]

Afternoon guys,

Quick question, I have been invited to go permie, and am seriously thinking about it.
What I am unaware of is what is the drawbacks of closing a company after only 18 months of trading?
Will this give me Taper relief with regards to drawing down what is left in the comany account.
Just throwing this out there, I will ask the accountant before I look at this in more detail.

Thanks

John

[dude69]

Afternoon guys,

Quick question, I have been invited to go permie, and am seriously thinking about it.
What I am unaware of is what is the drawbacks of closing a company after only 18 months of trading?
Will this give me Taper relief with regards to drawing down what is left in the comany account.
Just throwing this out there, I will ask the accountant before I look at this in more detail.

Taper relief will be 50%. It is 75% after 2 years.

Obviously you cease trading now, and wind the company up after exactly 2 years have passed to get the 75%.

Only catch is that CGT is going up in April, so you would need to do it before then.

[NotAllThere]

If you've only had one contract then some of your T&E are not allowable.

btw ... don't go permie. You'll only regret it.

[Crossroads]

If you've only had one contract then some of your T&E are not allowable.

Why?

[NotAllThere]

Because the IR say so. It's not considered a temporary workplace.

[welshman213]

Thanks guys,

Think they maybe not a financial viable as I first thought then.
And yes it would be only 1 contract, did do 1 days else where, but that was just invoiced.
Ho Hum, back to the drawing board.

Cheers

John

[Crossroads]

Because the IR say so. It's not considered a temporary workplace.

Cheers.

But...the "temporary workplace", "two year rule" and expenses etc aren't linked to your employer, contract or specific site are they?

You could contract to 10 different clients over a period of several years all within the Square Mile, via a brolly and multiple Ltd's you own and this would not count as a temporary workplace as the location has not changed.

A case of HMRC having their cake and eating it?

[ChimpMaster]

As regards to the taper relief option - the % applied depends on how long the company has actually been trading, not how long you leave it open. So if your Ltd has been trading 18 months and then you decide to go permie, you qualify for 50% relief. Even if you don't wind the Ltd down until > 2 years, if you haven't been trading for those additional 6 months then still only 50% applies.

It's a good time to take advantage of taper relief now seeing as it'll be withdrawn next April (it is April isn't it?).

[dodge1664]

there's some speculation in the press that the Govt may back down a little on CGT, the upshot being that as much as £100,000 may be exempt from the tax

http://www.telegraph.co.uk/money/mai...1/cncgt231.xml

It seems that they're determined to make it a one-off tax break though.

[welshman213]

As regards to the taper relief option - the % applied depends on how long the company has actually been trading, not how long you leave it open. So if your Ltd has been trading 18 months and then you decide to go permie, you qualify for 50% relief. Even if you don't wind the Ltd down until > 2 years, if you haven't been trading for those additional 6 months then still only 50% applies.

It's a good time to take advantage of taper relief now seeing as it'll be withdrawn next April (it is April isn't it?).

Ok, so if after 18 months I decide to close and cease trading, assuming I have £50k in the company account, are we assuming that I will have to pay £25k tax?