Closing company cost effectively

[Joanne]

My client has closed her company with. 55k of dividends in final accounts last year but now wants to see is she can reduce her tax bill . Two months before it closed it has 20k, can this be classed as capital or will this trigger an enquiry. If she reinstated the company through the courts what happens to the money taken out. Does this need to go into SElf assessment or can she say earlier costs paid were actually dividends reducing the final bill to 33k. She's a young mum and in a real state about this so any advice would be good. Thank you!

[cojak]

Your client??

What are you when you're at home?

(and your answer will influence where I put this thread...)

[barrydidit]

Hairdresser?

[Clare@InTouch]

If you're wanting to change history and restate accounts so that the tax bill is lower I'd say HMRC would have a field day.

A capital withdrawal would happen at the point of closure, you can't change a dividend to a capital distribution at a later date - and if you have over £25k then you need a formal liquidation in order to allow for such a large capital withdrawal.

The client should have got proper advice at the time, it's too late to liquidate if the company is closed and has already paid out all funds in dividends.

[mudskipper]

She's a young mum

What difference does that make to the price of fish?

[TheFaQQer]

My client has closed her company with. 55k of dividends in final accounts last year but now wants to see is she can reduce her tax bill . Two months before it closed it has 20k, can this be classed as capital or will this trigger an enquiry. If she reinstated the company through the courts what happens to the money taken out. Does this need to go into SElf assessment or can she say earlier costs paid were actually dividends reducing the final bill to 33k. She's a young mum and in a real state about this so any advice would be good. Thank you!

What did her accountant advise at the time of closure? I can't see anything good coming from reopening the company, having to repay the dividend, then fiddle about to lower the tax bill and then close it again.

Looks like the accountant may have missed a trick, but from here she should pay the tax, and if she really wants to, take professional legal advice and see if she can sue her accountant for mis-advising her in the first place.

[TheFaQQer]

What difference does that make to the price of fish?

Young mums can't get professional advice when they close their companies and take out £55k in cash. They're too busy cleaning behind the fridge or something,

[MicrosoftBob]

Young mums can't get professional advice when they close their companies and take out £55k in cash. They're too busy being MILFs

FTFY

[kal]

My client has closed her company with. 55k of dividends in final accounts last year but now wants to see is she can reduce her tax bill . Two months before it closed it has 20k, can this be classed as capital or will this trigger an enquiry. If she reinstated the company through the courts what happens to the money taken out. Does this need to go into SElf assessment or can she say earlier costs paid were actually dividends reducing the final bill to 33k. She's a young mum and in a real state about this so any advice would be good. Thank you!

Ship has sailed with respect to EA , pay the tax and move on.

[GazCol]

This thread is also on AccountingWeb - given there's more backstory there I think it's harsh to blame Joanne as her client seems to have acted without advice and off her own back when closing the company.