MVL & Strike off - options if perm or retirement goes pear shaped

[Mr_Z]

Interesting thanks for the replies these matchmy understanding too - good to see some consensus and the link to the tax experts page v useful

[northernladuk]

I can’t see any problem using an umbrella if you’ve MVL’d. That’s what I would do.

Problem is if you want to return to contracting very soon after. It could look like a very contrived solution that was designed to get around the legislation even though it isn't. I do believe Cojak is entirely right but care must be taken going forward.

[cojak]

I can’t see any problem using an umbrella if you’ve MVL’d. That’s what I would do.

[Amanensia]

1. For a voluntary strike off (not an mvl liquidation) where Dividends have reduced profit to <25k and a capital distribution (with or without ER claimed) is then taken, do the TAAR (or any similar) two year rules definitely not apply to prohibit opening another company without losing the capital gain advantage?

I don't believe the TAAR applies on strike-off. There are many sources online to this effect - one example from a reputable tax consultancy firm being here which includes the specific statment "This expanded definition and TAAR will not extend to a Distribution on striking off, where the £25,000 limit mentioned above will instead apply."

2. For a liquidation via MVL, if permiedom or semi-retirement or job hunting doesnt work out, can you def come back via an Umbrella within 2 years without any issues on this score?

Scenario is clear intention to semi retire or retire or equally someone intending to find and stick out perm work, but then it doesn’t work out

In theory this is fine, but that depends on you being able to convince HMRC (or, ultimately, a court) that the liquidation was "genuine", ie not driven by tax considerations alone. This may be easier in some circumstances than others (eg if you took a permie job but were subsequently made redundant etc that would most likely be OK; but quitting after 6 months for no obvious reason would probably not.) Where the line lies precisely? No idea, and will almost certainly depend on the specific circumstances of each case. I wouldn't expect proving this point in your favour to be straightforward in most cases.

EDIT: apologies, I read this as coming back via a LtdCo. Coming back via an Umbrella is no problem at all. Do this the day after you liquidate if you like.

[Mr_Z]

Posted this query in the Business section in response to some relevant & funny comments on how often people regret leaving contracting. Prob better here though - I know these topics have been done to death but have genuinely not found any unambiguous straight answers here or on the web & also via Accountants..
Anyone willing or able to have a go at confirming:

1. For a voluntary strike off (not an mvl liquidation) where Dividends have reduced profit to <25k and a capital distribution (with or without ER claimed) is then taken, do the TAAR (or any similar) two year rules definitely not apply to prohibit opening another company without losing the capital gain advantage?

2. For a liquidation via MVL, if permiedom or semi-retirement or job hunting doesnt work out, can you def come back via an Umbrella within 2 years without any issues on this score?

Scenario is clear intention to semi retire or retire or equally someone intending to find and stick out perm work, but then it doesn’t work out