To attempt it you'd need to argue that your company has continued to trade, it just happens to not have had any income recently. This might be tenuous if you've already done other things that make it clear you consider the company's trade to have ceased.
That aside, generally speaking an MVL will be one of the lowest tax ways to get cash out of your company and into your hands personally. I'd therefore question whether it's a good idea to make a big company pension contribution now even if you're able to.
If you're on a decent salary now, it may well make sense to get all the cash out via an MVL, then separately make a big personal pension contribution (potentially getting you personal tax relief at 40% or more).
If you're talking big numbers, might be worth discussing with an IFA. They'll be more aware of any possible pitfalls/similar of things like this than your typical accountant, certainly more so than a typical liquidator.
-
MVL; carry forward employer pension contributions; no corporation tax credit?
I will be closing my company via MVL within the next month, and was planning (before liquidating) to contribute to a pension using employer contributions and taking advantage of the carry forward allowances etc. The idea was this would avoid the ER 10% hit relating to withdrawing these amounts, and result in corporation tax refunds relating to the amounts (or at least reduce my final corporation tax bill, depending on amounts).
Now, my accountants have not always been reliable in terms of tax advice, hence my asking for advice on here regarding the below.
My accountant has informed me that if I were to pay in contributions now (relating to prior years), HMRC would not allow me corporation tax credits relating to the amounts as they would consider me to have "stopped trading" as I have no invoices since late March this year; i.e. no invoices in my current company accounting year (which is in line with tax year).
Does this sound correct? Thanks in advance for any responses on this.
Leave a comment: