Limited Company Windup

[Maslins]

The rules surrounding ER, yes, but the rules surrounding TIS are much less certain and, essentially, untested. In principle, any capital distribution (let alone ER) could be problematic under TIS. I think what you're saying is that YourCo handles the mechanics and the advice must come from elsewhere, which makes sense, but there are some risks in this area and advice is needed.

Correct. Two problems here:
1) as you've said, TIS is untested, so basically nobody knows for sure. Therefore any advice anyone gives you is just their opinion, which might of course be based on experience from other areas, but is still largely a guess.
2) we (MVL Online) don't know the history of the company, or the future for the individual work-wise. It's not our place to know. We therefore cannot be expected to give specific bespoke tax advice on a case by case basis. We can give some general guidance, but it's down to the client/their accountant to decide whether to proceed with an MVL, and what to do afterwards.

[Andrew@Wisteria]

Alternatively you can keep the company and submit dormant accounts and annual return every year and inform HMRC that the company is dormant. This might be beneficial for you if you want to return to the UK and carry on the same business with that company: the company will have history and this is usually better than a newco.

By having this history, easier to get a loan/mortgage/rent premises.

[Andrew@Wisteria]

You have to check with your client if they are happy to transfer existing contract to a third party.

To wind a company up you just submit a form to Companies House (DS01), pay £10 and everything will be done for you. Make sure that you have no contractual obligations which would prevent you from winding the company up.

Alternatively you can keep the company and submit dormant accounts and annual return every year and inform HMRC that the company is dormant. This might be beneficial for you if you want to return to the UK and carry on the same business with that company: the company will have history and this is usually better than a newco.

G you must be a long lost cousin of ours!

[jamesbrown]

MVL Online just does the liquidation. It's then down to the shareholder/their accountant to declare the distributions on their personal tax return, and claim entrepreneurs relief where appropriate.

To date we haven't heard of any of our ex clients claiming entrepreneurs relief and having it rejected...but there's a possibility it's happened and the client didn't let us know.

Entrepreneurs relief criteria are fairly black and white (see here), so unlike IR35 for example I don't think there's much scope for argument from HMRC.

The rules surrounding ER, yes, but the rules surrounding TIS are much less certain and, essentially, untested. In principle, any capital distribution (let alone ER) could be problematic under TIS. I think what you're saying is that YourCo handles the mechanics and the advice must come from elsewhere, which makes sense, but there are some risks in this area and advice is needed.

[Maslins]

MVL Online just does the liquidation. It's then down to the shareholder/their accountant to declare the distributions on their personal tax return, and claim entrepreneurs relief where appropriate.

To date we haven't heard of any of our ex clients claiming entrepreneurs relief and having it rejected...but there's a possibility it's happened and the client didn't let us know.

Entrepreneurs relief criteria are fairly black and white (see here), so unlike IR35 for example I don't think there's much scope for argument from HMRC.

[jamesearljones]

Imagine the OP is aware...but the above does NOT get you the same tax treatment if there's >£25k net assets in the company.

Hi Maslins, generally speaking do you find many cases where HMRC rejects ER for certain company windups presuming compliance with the law?

[jamesbrown]

I don't think see why it would.

Incidentally, aren't there special rules on claiming ER when leaving the country in the same tax year?

[Maslins]

To wind a company up you just submit a form to Companies House (DS01), pay £10 and everything will be done for you. Make sure that you have no contractual obligations which would prevent you from winding the company up.

Imagine the OP is aware...but the above does NOT get you the same tax treatment if there's >£25k net assets in the company.

[G@LindenAccounting]

I am considering going down the process of closing down and going through the MVL to liquidate my limited company.

Is it fine for me to transfer my current contract over from my limited company to an umbrella company?

You have to check with your client if they are happy to transfer existing contract to a third party.

To wind a company up you just submit a form to Companies House (DS01), pay £10 and everything will be done for you. Make sure that you have no contractual obligations which would prevent you from winding the company up.

Alternatively you can keep the company and submit dormant accounts and annual return every year and inform HMRC that the company is dormant. This might be beneficial for you if you want to return to the UK and carry on the same business with that company: the company will have history and this is usually better than a newco.

[northernladuk]

I'm likely to be leaving the UK for a couple of years after my current contract end and so wanted to finalise my limited company arrangements as soon as possible as it will take months.

Would transferring my current contract to an umbrella company constitute transactions in securities?

It might not but if your move goes Pete Tong and you end up having to open another LTD after you could be in trouble.

[Maslins]

I'm likely to be leaving the UK for a couple of years after my current contract end and so wanted to finalise my limited company arrangements as soon as possible as it will take months.

Would transferring my current contract to an umbrella company constitute transactions in securities?

I don't think see why it would.

[jamesearljones]

I believe so. What do you anticipate doing slightly further down the line?

Ie if you transfer it to an umbrella, only to then transfer it to Newco Ltd a few months later, you may well be at risk of the transactions in securities anti avoidance legislation biting.

I'm likely to be leaving the UK for a couple of years after my current contract end and so wanted to finalise my limited company arrangements as soon as possible as it will take months.

Would transferring my current contract to an umbrella company constitute transactions in securities?

[northernladuk]

I believe so. What do you anticipate doing slightly further down the line?

Ie if you transfer it to an umbrella, only to then transfer it to Newco Ltd a few months later, you may well be at risk of the transactions in securities anti avoidance legislation biting.

Very much this. Shutting the old company down to gain tax advantages while continue to trade is opening yourself up to a world of trouble.

[Maslins]

I am considering going down the process of closing down and going through the MVL to liquidate my limited company.

Is it fine for me to transfer my current contract over from my limited company to an umbrella company?

I believe so. What do you anticipate doing slightly further down the line?

Ie if you transfer it to an umbrella, only to then transfer it to Newco Ltd a few months later, you may well be at risk of the transactions in securities anti avoidance legislation biting.

[jamesearljones]

I am considering going down the process of closing down and going through the MVL to liquidate my limited company.

Is it fine for me to transfer my current contract over from my limited company to an umbrella company?