Reply to: Members Voluntary Liquidation questions

[MrContractor85]

I said I was going to so I did. A bit longer in the end. No way could I have justified this if I hadn't. I also didn't need a liquidation service so much quicker process avoiding the dual running of LTDs. Oh, it's the only time I've done it in 8 years as well.

Three month gap, evidence I didn't fully intend to carry on and no overlap. May not be as long as would be needed to be comfortable but easily defensible in the event it was queried IMO and professional opinion.

Where this might look like lipservice there can easily be situations where it's still a genuine. For example, you pack in contracting fully intending to go permie, role falls through and you are forced in to take a contract to make ends meet. The intention to just Phoenix the company for tax reasons was never there however much looks like it on face value.

Good man! Thanks for replying and clarifying, makes complete sense now

[northernladuk]

Sorry to resurrect an old post, but just wanted clarity on the above, northernladuk. You were going to take 3 months off, so I'm assuming you didn't, and in fact you liquidated your ltd company (using an MVL provider) and then started a new one fairly soon after? From that timeline, you probably opened newco whilst oldco was still going through the liquidation process? And I'm also guessing you remained in the same sector...

In a previous thread, a poster was querying whether taking a new contract 6 months after liquidating her ltd company would raise red flags with HMRC, and there wasn't a general consensus, yet I'm not sure why her situation was any different to this one? It's actually worse, on paper (albeit with a few emails that back up permanent role discussions, and an intention to take some time off)

Am I missing something?

I said I was going to so I did. A bit longer in the end. No way could I have justified this if I hadn't. I also didn't need a liquidation service so much quicker process avoiding the dual running of LTDs. Oh, it's the only time I've done it in 8 years as well.

Three month gap, evidence I didn't fully intend to carry on and no overlap. May not be as long as would be needed to be comfortable but easily defensible in the event it was queried IMO and professional opinion.

Where this might look like lipservice there can easily be situations where it's still a genuine. For example, you pack in contracting fully intending to go permie, role falls through and you are forced in to take a contract to make ends meet. The intention to just Phoenix the company for tax reasons was never there however much looks like it on face value.

[pr1]

Sorry to resurrect an old post, but just wanted clarity on the above, northernladuk. You were going to take 3 months off, so I'm assuming you didn't, and in fact you liquidated your ltd company (using an MVL provider) and then started a new one fairly soon after? From that timeline, you probably opened newco whilst oldco was still going through the liquidation process? And I'm also guessing you remained in the same sector...

In a previous thread, a poster was querying whether taking a new contract 6 months after liquidating her ltd company would raise red flags with HMRC, and there wasn't a general consensus, yet I'm not sure why her situation was any different to this one? It's actually worse, on paper (albeit with a few emails that back up permanent role discussions, and an intention to take some time off)

Am I missing something?

Did you not read? He spoke to his accountant, and two others - it's "super clean"

[MrContractor85]

Hmmmm...

Interesting one this. I shut my company down as soon as I finished a gig and was going to take 3 months off. I spoke to two accountants about this as well as my own as I wanted to be super clean. They asked me if I was 100% sure I would go contracting again and my honest answer was probably but not 100% sure. If anything else not contracting came up that was better I would consider it. I was told by all three that this was enough justification and would be defendable. I also had some discussion regarding a perm job in that time which also backed this up so no problem. I ended up going contracting again of course but still I believe I was justified.

Sorry to resurrect an old post, but just wanted clarity on the above, northernladuk. You were going to take 3 months off, so I'm assuming you didn't, and in fact you liquidated your ltd company (using an MVL provider) and then started a new one fairly soon after? From that timeline, you probably opened newco whilst oldco was still going through the liquidation process? And I'm also guessing you remained in the same sector...

In a previous thread, a poster was querying whether taking a new contract 6 months after liquidating her ltd company would raise red flags with HMRC, and there wasn't a general consensus, yet I'm not sure why her situation was any different to this one? It's actually worse, on paper (albeit with a few emails that back up permanent role discussions, and an intention to take some time off)

Am I missing something?

[Jessica@WhiteFieldTax]

Indeed it was and indeed they were

I would happily refer other clients on to Maslins.

[Maslins]

Hi, I stopped contracting about 11 months ago and have been a perm employee since then. I have approx £120k in my Limited Company account, no debt or other assets and have all my corp tax paid. My accountants advised me to go through a strike out and pay full CG on my earnings, which I agreed to. Since then some friends mentioned that they would be going through MVL and applying for entrepreneurial relief. I didn't even know what this was! I have since withdrawn my strikeout. My accountants said I wasn't eligible for ER when I asked them why they didn't suggest it (apparently theres a £25k limit???). I am now feeling very lost and trying to figure out the best approach for me given my situation, but I have no tax background. Based on some research MVL seems like the right path and other tax advisors told me I should be eligible for ER. Now I just need to appoint a liquidator.

My accountants referred me to someone who quoted £2500+ all additional expenses + vat. I have seen a few posts here about MVL Online and wanted to get your thoughts. Its seems like all the posts on positive experiences using MVL are people who have only made < 10 contributions to this forum so Im a bit wary of how real they are... maybe I am being overly cautious.. Can anyone suggest a reliable, reasonably priced liquidator ..

If you've got >£25k net assets and qualify for entrepreneurs relief (most contractor companies will provided they've been trading >1 year) then an MVL is likely the best option for you. Strike off will not obtain the same tax treatment where >£25k net assets.

Re number of posts, sure there's nothing illogical in what you've said...but at time of writing you've done one post, does that make you untrustworthy? There have been a handful of more long term CUK forum goers using our service...but typically people use MVL Online after they've finished contracting, hence they'd often then have no desire to frequent this forum again. Point being people who are still forum regulars are unlikely to have used us.

We've recently taken on our 400th appointment since we started ~3 years ago. We were the first to cater specifically to the post ESC C16 market. We're as reliable as any.

Cheers Contratax for kind words. Also see final post on this thread, Jessica's very well respected on here and her client was very happy with the service. Appreciate their post just says "MVL" rather than "MVL Online" but it's clear from the thread/context that it was one we did!

[ContrataxLtd]

Hi, I stopped contracting about 11 months ago and have been a perm employee since then. I have approx £120k in my Limited Company account, no debt or other assets and have all my corp tax paid. My accountants advised me to go through a strike out and pay full CG on my earnings, which I agreed to. Since then some friends mentioned that they would be going through MVL and applying for entrepreneurial relief. I didn't even know what this was! I have since withdrawn my strikeout. My accountants said I wasn't eligible for ER when I asked them why they didn't suggest it (apparently theres a £25k limit???). I am now feeling very lost and trying to figure out the best approach for me given my situation, but I have no tax background. Based on some research MVL seems like the right path and other tax advisors told me I should be eligible for ER. Now I just need to appoint a liquidator.

My accountants referred me to someone who quoted £2500+ all additional expenses + vat. I have seen a few posts here about MVL Online and wanted to get your thoughts. Its seems like all the posts on positive experiences using MVL are people who have only made < 10 contributions to this forum so Im a bit wary of how real they are... maybe I am being overly cautious.. Can anyone suggest a reliable, reasonably priced liquidator ..

Hi Melb

I think there has been some confusion here on the part of your accountant from what you have said.

With £120k in the bank (assuming this is purely retained profits) you can either withdraw it as a dividend (possibly over a number of years) and pay the tax accordingly, probably not very efficient this though assuming you are earning in excess of the High Rate threshold with your permie job

or

Go through a Members Voluntary Liquidation. This will enable the withdrawal to be treated as capital and probably taxed at 10% (after the annual exemption of £11,000 for 2014/15 - £11,100 in 2015/16) assuming you qualify for entrepreneurs relief. You could even possibly get a distribution in 2014/15 to use this years annual exemption with the balance being distributed in 2015/16 to save even more tax!

To qualify for Entrepreneurs relief you need to have held at least 5% of the shares in the company for at least 12 months, you must have been an officer or employee and the company must have been trading. It's not clear if you meet all these but assuming you've been contracting for a while to generate £120k retained profit you probably do.

MVL Online are the cheapest liquidators around at the moment I think and come highly recommended on here. I've dealt with Chris there a few times and he couldn't have been more helpful on all occasions!

The £25k limit is a bit of a red herring in this context, if net assets are below £25k you can close the company down using the simple strike off procedure and treat the distribution as capital (similar to the old ESC C16 but this didn't have a Monetary cap).

It also sounds like a DS01 had been submitted to Companies House to start the strike off procedure which I think you have withdrawn? Please ensure that any strike off procedure has been cancelled as your bank account could be frozen as part of the strike off proceedings if not done properly!

Hope this helps

Martin
Contratax Ltd

[melb]

Hi, I stopped contracting about 11 months ago and have been a perm employee since then. I have approx £120k in my Limited Company account, no debt or other assets and have all my corp tax paid. My accountants advised me to go through a strike out and pay full CG on my earnings, which I agreed to. Since then some friends mentioned that they would be going through MVL and applying for entrepreneurial relief. I didn't even know what this was! I have since withdrawn my strikeout. My accountants said I wasn't eligible for ER when I asked them why they didn't suggest it (apparently theres a £25k limit???). I am now feeling very lost and trying to figure out the best approach for me given my situation, but I have no tax background. Based on some research MVL seems like the right path and other tax advisors told me I should be eligible for ER. Now I just need to appoint a liquidator.

My accountants referred me to someone who quoted £2500+ all additional expenses + vat. I have seen a few posts here about MVL Online and wanted to get your thoughts. Its seems like all the posts on positive experiences using MVL are people who have only made < 10 contributions to this forum so Im a bit wary of how real they are... maybe I am being overly cautious.. Can anyone suggest a reliable, reasonably priced liquidator ..

[northernladuk]

Does it help you pay your expenses from the company to your personal account. I know a poster that might be interested in that

[Craig at Nixon Williams]

Oooo.... new updates due Craig ?

We have a few small improvements to functionality due for release quite soon – these have been developed based on feedback received over the past few months so will hopefully prove to be popular with existing users.

We have also been working on mobile applications, for iOS and Android, which are in alpha test at the moment and will be moving to beta shortly (iOS will be ready first). These represent our main development effort since launch last year.

[regron]

I’ve been busy, NLUK, developing our online accountancy application. I’d highly recommend it if you want to give it a try?!

Oooo.... new updates due Craig ?

[neilkellett]

Purnells

https://www.purnells.co.uk/limited-c...uidations.html

Can highly recommend Suzi Purnell. She sorted my MVL out 2 years ago. She knew far more about the process than my PCG approved accountant and saved me fees that they were looking to charge.

[TheCyclingProgrammer]

Just with my pedant hat on for a second I didn't think shutting down for a tax advantage was technically Phoenixing. The definition of Phoenix companies is..

No, you're quite right. Phoenixing is actually something different but its commonly used to describe the scenario you outlined too.

[northernladuk]

I’ve been busy, NLUK, developing our online accountancy application. I’d highly recommend it if you want to give it a try?!

I'd love to. Send me your email and I'll send you my day rates over

[Craig at Nixon Williams]

Craig!! Where the devil have you been???

I’ve been busy, NLUK, developing our online accountancy application. I’d highly recommend it if you want to give it a try?!