IR35 and company liquidation

[londonmag]

If a company - typical ltd co for it contractor is liquidated - which is properly done to retain most effective release of funds etc; can it then be investigated / re-opened for an IR35 investigation.

[northernladuk]

If a company - typical ltd co for it contractor is liquidated - which is properly done to retain most effective release of funds etc; can it then be investigated / re-opened for an IR35 investigation.

Is this a genuine question or are you asking for advice on the best method to dispose of a company that has been running a fiddle for a number of years and will you get caught?

[xoggoth]

I believe so in theory, although as HMRC have to be notified of closure and have the chance to check things then it seems unlikely to happen too often.

[northernladuk]

Not knowing anything much about this area do you not have to be insolvent to think about liquidation therefore not have any funds to release?

Do you mean shutting the company down using the entrepreneurs relief instead?

And as a comparison here is a guide to Insovlency and Liquidation

[Wanderer]

Is this a genuine question or are you asking for advice on the best method to dispose of a company that has been running a fiddle for a number of years and will you get caught?

What makes you think he may be "running a fiddle"? I presume that you are trading inside IR35 because pretty much everyone trading outside IR35 is running the risk of an investigation. I think it's a legitimate question, it's not up to use to pass judgement on the way someone has traded.

I understand that HMRC will object to a company being dissolved if the paperwork was not all up to date but what if everything is done correctly, final accounts filed, CT paid, VAT paid, final dividends paid, application to strike made. What then? If the HMRC allow the company to be struck, can they re-open the company for an IR35 (or any other type) investigation?

Or would answering that question let the cat out of the bag....

[northernladuk]

What makes you think he may be "running a fiddle"? I presume that you are trading inside IR35 because pretty much everyone trading outside IR35 is running the risk of an investigation. I think it's a legitimate question, it's not up to use to pass judgement on the way someone has traded.

I understand that HMRC will object to a company being dissolved if the paperwork was not all up to date but what if everything is done correctly, final accounts filed, CT paid, VAT paid, final dividends paid, application to strike made. What then? If the HMRC allow the company to be struck, can they re-open the company for an IR35 (or any other type) investigation?

Or would answering that question let the cat out of the bag....

I think this for a number of reasons...

1) New poster with 1 post. You know what kind of scams we often get asked by single posters
2) Why liquidate? Why not just close it through the normal method? Sounds like OP is looking for a dodgy out, either that or doesn't understand the difference and the situation he is is. I am still confused how you can liquidate a LTD and draw remaining funds. Sounds dodgy
3) Why would the OP be so worried about an IR35 investigation. We are as you mention all in the line for one of these but to ask the questions specifically sounds like he knows he was in IR35, got his money, claimed out of IR35, wants to bin off the company and destroy any evidence or chance of being investigated.

I am not passing judgement, I am asking a question based on a pretty wooly post that doesn't make sense.

[ASB]

I think it might have been a poor choice of words by the OP. The informal route route through ESC16 as was is much cheaper than a members voluntary liquidation.

Assuming the IR accept the winding up then they are probably powerless to reopen it. However part of the process involves the IR accepting the tax affairs are in order.

Whether this would actually insulate anybody from any IR35 liabilities is an open question. There is a body of opinion that suggest it probably does (save for fraud or wilful negligence), searching THEPUMA posts may be beneficial.

NLUK:

I am still confused how you can liquidate a LTD and draw remaining funds. Sounds dodgy

A members voluntary liquidation is entirely normal. The shareholders (for whatever reason) decide to wind the company up and it's solvent. Tends to be referred to as members voluntary winding up. Though if it turns out the company is in fact insolvent it then (if I recall correctly) becomes a creditors voluntary liquidation.