Closing down company / Capital Distribution

[Trev16v]

That advice is much appreciated. Aside from the actual process of closing down the company, I was also seeking opinions like this on whether it's the right thing for me to do in the first place.

Just one thing I need to clarify: with the new company tax year starting early April, presumably the company should be closed very swiftly by the end of this month to avoid being 'captured' by the next tax year, so I don't have to file accounts for 2010/2011?

[Wanderer]

That advice is much appreciated. Aside from the actual process of closing down the company, I was also seeking opinions like this on whether it's the right thing for me to do in the first place.

Definately the right thing to do. You built a business, now it's closing down because you have moved on to permiedom. That's a more legitimate than average reason in my opinion.

[Trev16v]

Right, I've just had a long chat with a lady at Brookson who phoned me regarding the company cessation process.

Her job was to go through the ins and outs of closing the company with me, and also to make sure I'm aware of the other option which is to keep the company open and pay Brookson £16 per month for their non-trading service (whatever it's called).

I'm going to have a tax advisor phone me later to talk about taking the remaining company cash out as capital distribution.

One thing that has been mentioned to me today is the fact that Ltd. company closure is something that would only normally be done if you're never intending to work in that particular sector ever again or for 'a long time'. I don't really know if there's any specific minimum time gap you have to have between closure and starting up a Limited company again in the same sector. It seems a bit of a grey area to me but I'm hoping to be advised on this more later.

Oh, and the £100ish fee that Brookson wanted to sting me for first wasn't for the cessation process. That £100 fee was for the CGT consultation, i.e. taking the final cash out as capital distribution. The actual fee for cessation is something like £420+VAT, as mentioned in that other Brookson thread.

Hopefully I'll learn more later, but I'm getting the impression at the moment that closing the company, grabbing my remaining cash under CGT (and thus having the first 10.1K tax free) and then starting up another Ltd. company in the same sector two years down the line (say) may not be so simple.

Trev

[questiontime]

One thing that has been mentioned to me today is the fact that Ltd. company closure is something that would only normally be done if you're never intending to work in that particular sector ever again or for 'a long time'.

You are taking permanent work. Therefore it is permanent. End of discussion. Nothing grey here. If you change your mind after a year, it is up to you.

For people who close the company to make use of the CGT and show that they never intend to do a business in IT, by going on a holiday, using an umbrella company etc, the intentions are questionable and it is a grey.