Reply to: Entrepreneur's relief

[WordIsBond]

"Shoot first, ask questions later" may be ok in some battlefield situations. But if you close your company and ask questions later, you're shooting yourself in the foot.

[northernladuk]

Looks like asking your accountant wasn't the right advice this time

https://forums.contractoruk.com/acco...ml#post2480513

Interesting how it's jumped from 20k to 40k though....

[northernladuk]

If needed, I can replace the £40k, what are my options?

Thanks

Replace to where? The company doesn't exist.

[MrButton]

Obvs a wind up from a regular.

Sockie.

[Maslins]

Maslins,
The company was dissolved in April 2014 (shown on the Companies House website), the corporation tax was paid before the company was dissolved. Before dissolving the company, I transferred the £40K into my personal account.

If needed, I can replace the £40k, what are my options?

Thanks

April 2014? Earlier you said April this year?

If the company is dissolved, then you don't really have a viable option IMHO. Unless you were to go through the expensive restoration process first, you can't close down the company a different way.

If closing net assets were £40k, and the company has been struck off (rather than liquidated), then that £40k would be taxable on you as dividends. Next question based on the dates would be whether it was dividends in 2013/14, 2014/15, 2017/18 or 2018/19, depending upon when you withdrew the £40k.

[Biggles78]

Maslins,
The company was dissolved in April 2014 (shown on the Companies House website), the corporation tax was paid before the company was dissolved. Before dissolving the company, I transferred the £40K into my personal account.

If needed, I can replace the £40k, what are my options?

Thanks

[Lance]

A good professional doesn’t offer advice on subjects about which they know feck all.

you've not met my window cleaner

[Maslins]

Biggles - forgetting the money for the time being, can you confirm what is the state of your Ltd Co? Ie if you go to the Cos Hse webcheck service here, does it show as "Active", "Dissolved", "Proposal to strike off"...or possibly even "Liquidation"? As others have suggested your OP is a bit confusing, you say you closed it April this year, but then say there's £40k left in the company, then that you've dissolved it!

If the company is still active, next question is what's the situation with the money at the moment? Eg we've had a couple of cases where for whatever reason the client had closed the company bank account and had a cheque for all the funds made out to their company (which is fine, the liquidator can bank that). Or perhaps you've transferred the funds to a personal account of yours? If the latter...do you still have all the money, or have you spent a large chunk of it meaning you couldn't readily replace it?

You may still have some options, but at £40k whilst it can potentially be worthwhile, you may well decide to just press on as you are and have it taxed as dividends.

[northernladuk]

Surely if he's withdrawn all the money and there is no longer a company in existence he is no longer a shareholder so cannot claim them as dividends? He's going to get taxed on the whole amount as salary?

[jamesbrown]

That's like saying you should trust a window cleaner to advise you on what window frames to install.
They are different professions related only by the subject of their profession. They might even be able to give good advice on the window frames but it's still not their area of specialisation.

A good professional doesn’t offer advice on subjects about which they know feck all.

[Lance]

Bugger, so much for trusting the accountant!

That's like saying you should trust a window cleaner to advise you on what window frames to install.
They are different professions related only by the subject of their profession. They might even be able to give good advice on the window frames but it's still not their area of specialisation.

[Biggles78]

Bugger, so much for trusting the accountant!

[craigy1874]

You have taken dividends from final profits, the MVL and ER ship has sailed I am afraid.

Your accountant really should have been aware of the procedure involved to close a company via MVL.

Expensive mistake!

[cojak]

You should have contacted MVLOnline before you did anything else.

I’m not sure if you’ve messed up or not but I’m glad not to be in your situation.

Chris has taken me though this - it’s easy but it needs to be done in the right order.

And they will tell you if they expect HMRC will object, usually not - HMRC just want things closed down properly and given the tax that they expect (which includes the ER).

[northernladuk]

I transferred the money out before closing on the advice of my accountant. The company account had a balance of 0 when closed.

Then there is nothing to claim ER on or from. The company is gone and the money is gone. All you've got is a proper mess you need to sort out pronto.

Isn't it this type of mess that triggers investigations?