Closing down ltd co.

[Maslins]

As others have said, £10k seems well OTT. Most high street liquidators will perhaps charge ~£3k+VAT plus disbursements. There's several "low cost" operators (including MVL Online which I'm 50% owner of) where it's more like ~£1k+VAT plus disbursements (typically ~£1.6k-1.8k all in). Worth stressing this is generally on the basis that you/your accountant have tidied up the accounts simplifying things down to just a cash at bank balance (ie all tax matters dealt with, assets sold off etc).

Generally speaking you'll get an £11k annual exemption for CGT and pay 10% on the balance...so with £100k you'll end up paying personal tax of ~£9k, combine that with the costs, you'll have just under £90k left for you at the end of it.

Do bear in mind also that if your plan is to set up a new company doing a similar thing soon after, most of the tax benefits will be clawed back.

[Lumiere]

What are you going to do after, permanent ? Retirement ?

[EinsteinTax]

There are many factors to consider here and it depends on your individual circumstances, so best to speak to your accountant.

Your initial calculation of 10% on on £90k doesn't take into account the £11,100 CGT annual exempt amount. It may be possible to spread the distributions over 2 tax years and obtain 2 CGT annual exempt amounts. If there are multiple shareholders (e.g. wife) then they may also have CGT allowances that can be used.

Chris Maslin @ MVL Online is very good if you decide to opt for a Members voluntary Liquidation (MVL) and their fees are likely to be much less than £10k.

[Darren at Fox-Bartfield]

Company Closure

Am thinking of winding down my ltd co (and claim entrepreneurial relief).

Been told if I have more than £25K in the account, I must go through a liquidator, which charges a fee.

Can someone please tell me roughly how much this would cost and why is there such a disparity between them?

Assuming I have £100K in my account. If I paid a liquidator £10K, does that mean the rest (£90K) will be taxed at 10%, leaving me with £81K or is it a tiered system?

Thanks

I'd recommend you sit down with your accountant and work out a strategy to close the company. They will have all the information to hand in order to max the return from a closure (i.e. details of salary, dividends, directors loans, other income, etc). As well as able to calculate any final tax liabilities for yourself and the company.

If you'd like a referral to an insolvency guy, please PM for details or I'm sure Chris @Maslins will be along shortly to advise on costs as well.

There's no one strategy fits all on a company closure, should be tailored to your circumstances.

[TheCyclingProgrammer]

Firstly you can get an MVL done for much less than that - a couple of grand at most really.

Ensure you've taken enough dividends to use up your basic rate income tax band before starting the process.

What's left after settling all liabilities and your MVL bill should be distributed as capital to the shareholders subject to CGT (but don't forget your CGT allowance).

Make sure you're aware of the rules regarding taking a capital distribution if you intend to go back to contracting again within the next few years.

If you're eligible for entrepreneurs relief the tax rate should be 10%.

[northernladuk]

Didn't like the answers in your other post when you asked this?

[smileyface]

Am thinking of winding down my ltd co (and claim entrepreneurial relief).

Been told if I have more than £25K in the account, I must go through a liquidator, which charges a fee.

Can someone please tell me roughly how much this would cost and why is there such a disparity between them?

Assuming I have £100K in my account. If I paid a liquidator £10K, does that mean the rest (£90K) will be taxed at 10%, leaving me with £81K or is it a tiered system?

Thanks