Restart trading after VAT de-registration

[tractor]

...

Keep things simple:

* Continue with liquidation as planned rather than trying to start undoing stuff
* Take extra contract on through an umbrella, take a small tax hit for the sake of keeping things simple and not jeopardising any claim to entrepreneurs relief on your capital distribution from your liquidated company

Of course, if you have little in the way of funds left in the company and aren't claiming ER, then all this talk of "phoenixing" (not actually the correct term but still...) is irrelevant and if you want to start a new company, go for it, but seems unnecessary for a single contract.

Especially if you are prone to changing your mind even when you say you are settled.

[clanas]

Thanks for the suggestion. Is there any issue in starting a new company while liquidation is going on? I have about 30 k fund in it. However, I wont be using it for the new one. So this will come as ER?
In the new one also, I need to make my wife as about 40% shareholder but not as employee

[TheCyclingProgrammer]

Thanks for the suggestion. Is there any issue in starting a new company while liquidation is going on? I have about 30 k fund in it. However, I wont be using it for the new one. So this will come as ER?
In the new one also, I need to make my wife as about 40% shareholder but not as employee

Setting up a new company now is not a problem. Making your wife 40% shareholder is not a problem (but maybe consider making her a director or company secretary too).

The issue, as others pointed out, is if you receive the £30k (assuming this is all retained profit) as a capital distribution and claim entrepreneurs relief (on the balance after allowing for your CGT allowance) to reduce your CGT bill to 10%, it *could* look like you are setting up the new company to continue the same business and HMRC can apply the anti-avoidance provisions in the "Transactions in Securities" legislation to counteract the savings made by claiming ER.

The end result being, you will owe to HMRC the difference in tax between the full CGT rate and the ER rate (10%) plus interest.

If you don't claim ER and pay the full CGT bill, then this is irrelevant. Closing down one company and starting another in itself is nothing out of the ordinary.

But I would still just use an umbrella.

[Contreras]

I may have missed something here but what's the issue with continuing with the old/existing co.?

CT: presumably you'd just need to advise HMRC that the co. is trading again (CT41?).

VAT: re-registering isn't a big deal, don't need an accountant for that.

A couple of phone calls to HMRC might quickly set this thing back on the rails and avoid faffing with new bank account, etc. just for one contract.