Personal Tax after company closed

**ASB** · 7 November 2008, 12:26

It's taxable under whatever regime it was taken in. You give no indication of this. It could be dividend income, it could be capital, it could be viewed as a bonus. Just depends what you did and how you did it.

**bijuv** · 7 November 2008, 12:38

I just withdrawed it after my accountant said that the company has been closed and i can withdraw the money left in the company account.

so what would this amt be treated as?

**bijuv** · 7 November 2008, 13:05

Originally posted by ASB View Post

It's taxable under whatever regime it was taken in. You give no indication of this. It could be dividend income, it could be capital, it could be viewed as a bonus. Just depends what you did and how you did it.

My accountant told me to withdraw the remaining balance after the company was closed. I did not do any business in that yr and hence had to close it as i took a permanent job.

I didn't have any capital investment in the company so would this be treated as a dividend/bonus.

The Million dollar question is Do i have to pay tax on this amt? It would go more than 40% if i add my salary on top of it.

Also looking at the financial status, i wonder i can manage a loan to pay the tax.

pls advise

**Crossroads** · 8 November 2008, 10:46

Originally posted by bijuv View Post

My accountant told me to withdraw the remaining balance after the company was closed. I did not do any business in that yr and hence had to close it as i took a permanent job.

I didn't have any capital investment in the company so would this be treated as a dividend/bonus.

The Million dollar question is Do i have to pay tax on this amt? It would go more than 40% if i add my salary on top of it.

Also looking at the financial status, i wonder i can manage a loan to pay the tax.

pls advise

You need to speak to your old accountant and / or check your final accounts as these will detail how the funds were distributed.

Did you apply for ESC C16?
Do you have dividend vouchers for this income?
Did it feature as salary on your final P45?

The answer should be yes to one of the three above, which will then dictate what liability you will have.

**ASB** · 8 November 2008, 11:42

If you applied for and got ESC16 then it is treated as a capital dirstribution. In this case you have a 27k capital gain, knock off your 9k allowance and this leaves 18k chargeable at your highest marginal tax rate (probably 40%) resulting in a tax bill of some 7.2k. It's down to you to put it on your tax return.

Depending upon the length of time trading and your specific tading details then you may get some taper relief. This can cause the 27k to be reduced for tax purposes. Certainly down to a level where no tax is payable on these figures.

If you went through a formal liquidation (doubtful) then it is likely treated as above.

If it was paid as a dividend then it is treated as any other dividend. Given you would appear to be a higher rate tax payer this means you will have to pay tax of 25% of the portion of the dividend in the higher rate band. Again it's down to you to get your tax return right.

If it was a bonus or similar then it should have been treated as any other salary payment.

You really need to check with your accountant how it was done.

**TheFaQQer** · 8 November 2008, 12:00

Originally posted by bijuv View Post

I did not do any business in that yr and hence had to close it as i took a permanent job.

FWIW, that's not correct - just because you did no business in the year does not mean that you had to close the company down.

**bijuv** · 10 November 2008, 10:17

Originally posted by Crossroads View Post

You need to speak to your old accountant and / or check your final accounts as these will detail how the funds were distributed.

Did you apply for ESC C16?
Do you have dividend vouchers for this income?
Did it feature as salary on your final P45?

The answer should be yes to one of the three above, which will then dictate what liability you will have.

Looking at all the feedback from all the users here, i feel bit cheated as my accountant didn't mention anything. They just charged me for everything and didn't do a proper job in closing the company.

Did you apply for ESC C16?
I have not applied for any ESC C16.

Do you have dividend vouchers for this income?
nor did i have any dividend vouchers

Did it feature as salary on your final P45?
Also its not mentioned on my P45

I only realised about the whole issue when i was doing my self assessment.

I don't want to enter figures on the self assessment form and end-up paying lots of tax. Pls advise as the best possible solution.

Any advise/help would be really appreciated.

Thanks

**Crossroads** · 10 November 2008, 19:46

You need to find that dividend voucher...(and 25% of the sum that will be going to HMRC)

**TheFaQQer** · 10 November 2008, 20:02

Originally posted by Crossroads View Post

You need to find that dividend voucher...(and 25% of the sum that will be going to HMRC)

Wouldn't it need to have been included with the closing accounts that would have been filed with companies house?

IANAA so have no idea how it works.

Personal Tax after company closed