Closing down company / Capital Distribution

**northernladuk** · 25 March 2010, 18:13

I have been good today so I get one moment of madness for free don't I??? Good...

<Sigh> Have you searched? There is a question about this still active on the first few pages I believe let alone the number times this has been asked before. I seem to remember one thread where someone one did a pretty good write up on this but I had a very quick look and can't remember where it was as there are so many.

Closing it down, taking the money and re-starting, although possible I think, is frowned upon for obvious reasons but yours seems exactly why this exists so don't see a problem.

Have a quick search for some keywords and see what comes up.

**Olly** · 25 March 2010, 18:17

Three options:
close and hopefully pay 10% if HMRC approve
invest in pension
leave and draw as dividend when you're old and frail
or just plain leave, you'll be back to contracting sooner or later, they always come back!

If I go perm, I'd try to arrange a better rate for the annual returns, or do them myself

**northernladuk** · 25 March 2010, 18:17

Ok I think I found it. Although I trawled through it I didn't read it so could be wrong...

but here you go...

Linky

Also do a search for the word Close in Title Only in the Accounts section. 36 posts all on roughly the same topic.

Enjoyyyyyyyyyyyyyyyyyyy

**northernladuk** · 25 March 2010, 18:17

Originally posted by Olly View Post

Three options:
close and hopefully pay 10% if HMRC approve
invest in pension
leave and draw as dividend when you're old and frail

Olly thats not very clear.. I don't understand...

**diesel** · 25 March 2010, 18:22

Originally posted by Trev16v View Post

Hi all,

Until recently I was contracting through my own Ltd. company, which was set up for me by Brookson. Brookson continue to do my accountancy for me.

Trev

Lucky youre closing company down..otherwise using Brookson's can be bad for your company and health

**northernladuk** · 25 March 2010, 18:27

Originally posted by diesel View Post

Lucky youre closing company down..otherwise using Brookson's can be bad for your company and health

He speaketh no lie. A quick search (dam I am good) reveals some nightmares..

one for you particularly Trev. Someone else using them and shutting company down. Discussion around charges you will incur

Closure Charges

And nightmare one from someone else...

Brookson Nightmare

**Trev16v** · 25 March 2010, 18:39

Apologies - usually I'm very good at using the search function first but I think I erm... okay, I'll go and stand in the corner and face the wall.

It has been most interesting seeing your comments relating to Brookson though, and thanks for the links to the relevant threads. I have just had an email from Brookson tonight informing me that the fee is £100, but this isn't a fee to leave Brookson, as such; rather, it's their fee to do the additional administration required to close the company. I'll look into it further and see what other charges there may be.

I have personally always been happy with my service from Brookson and I find them helpful over the phone, so it's rather depressing to read the horror stories.

**northernladuk** · 25 March 2010, 19:59

To be fair there isn't a lot of them and I am sure they have a lot of customers. Show me a business that hasn't cocked up badly in a few cases and people bay for their blood. It happens but sometimes there is no smoke without fire.

**MarillionFan** · 25 March 2010, 20:18

Originally posted by Trev16v View Post

Hi all,

Until recently I was contracting through my own Ltd. company, which was set up for me by Brookson. Brookson continue to do my accountancy for me.

I've just gone permie with the client I was contracting for (I know, I know - but they made me an offer too good to refuse). I see myself being in this permanent position for the foreseeable future; say for two years at least. I do not expect to be doing any contracting work over this period.

I've spent a lot on the house in the last few months and so the amount of money I have withdrawn as director's fees / dividends, minus my expenses, is not far off the £43,875 HRT threshold. I still have about 20K sat in that business account which I'd like to take out in the most tax efficient way. My permie salary goes into the HRT threshold now anyway, so I don't believe there's any benefit to waiting until next tax year to take that 20K out. Whether it's now or later, I'll be clobbered with HRT.

Brookson have said to me however that a good option might be to close the company down and take the cash as capital distribution. If I quality for it, then I could take the first 10K tax free and the remaining money would be subject to either 10% or 18% tax (I don't understand at this moment why it's 10% or 18% but I will no doubt find out). Brookson inform me that approval is required from HMRC before you can take money as capital distribution.

The reason for this post is simply because I'm wondering what other options there are that I should consider. Or are there any issues with closing the company down and taking capital distribution that I should be aware of?

Thanks,

Trev

I also converted a few years back but left the company open. I was doing my own book-keeping, VAT etc but because I was busy elsewhere fell behind and eventually landed up with a massive fine, shed loads of hassle and paperwork.

If you believe that you are done, I would recommend you close the LTD, taking the money out in whatever your accountant suggests is the best way, but also taking into consideration end of this financial year versus a salaried role going forward. Also consider the hassle factor and costs of paying Brooksons ongoing. If you're LTD company straddles two financial years, it means you will have to pay for your accountants to be done twice(if its not part of their deal that is).

Go hassle free IMO.

Closing down company / Capital Distribution