Reply to: MVL - HMRC Clearance

[dhauser]

I'm still waiting...

Looks like you've beat my record!!!

[mrswilson1960]

I'm still waiting...

[oleanderwand]

Does anyone who has gone through a completed MVL know why sometime Ltd shown on CoHo website as 'Dissolved on <dissolution-date>' on 'Overview' tab but still shown as 'Due to be dissolved on <dissolution_date>' on 'Insolvency' tab? What does this difference mean, if anything?

For example: an Ltd was MVL-ed and shown as dissolved on say 18 Nov 2021 (random date chosen to allow enough time has passed for CoHo document processing so in theory status on CoHo website should be fully up to date). Its 'Overview' tab on CoHo website shows 'Dissolved on 18 Nov 2021' but on 'Insolvency' tab sometime still shows 'Due to be dissolved on 18 Nov 2021'.

Accountant does not know and I tried to ring CoHo but gave up after waiting to go through. I can't ask liquidator because my Ltd still on prep stage and hasn't appointed any yet. Any thoughts or info is much appreciated.

[dhauser]

Just had word from my liquidator that they've just received clearance from HMRC. 19 months that's taken........

[Smuz]

I am currently waiting 13 months for my HMRC closure however my liquidator provided the funds early on.

They have contacted me recently and the plan is for them to get access to my CT and PAYE accounts and they plan to check it themselves. If all looks good they will instruct companies house to mark the company as dissolved.

Does anyone know if this is a legitimate approach?

[dhauser]

did you get yours resolved? I'm approaching 16-17 months and still waiting.

Not yet. However, I chased my liquidator again and they contacted HMRC MVL Team earlier this month. HMRC advised that the case has not been raised by their department, despite my liquidator sending multiple clearance requests and chasing up phone calls since their appointment. HMRC stated that due to a backlog since last year this may have been missed and that is why clearance has not been issued. They are apparently going to review urgently and respond within a couple of weeks. I won't hold my breath though.

So I guess the HMRC is in a mess and it's probably worth you asking your liquidator to give them a call to check that a case has been raised.

[mrswilson1960]

Thanks for the response. I’m going through Clarke Bell. 6-8 months is the kind of delays I would expect but the 16 months I’ve been waiting seems excessive.

did you get yours resolved? I'm approaching 16-17 months and still waiting.

[oleanderwand]

Thanks Maslins for clarifying and explaining this, now I get it. Much appreciated.

[Maslins]

Thanks Maslins. So in practice (not specific to MVLOnline. MVLOnline is on my list of preferred liquidators by the way, though I haven't decided who I will go with) liquidators may not need to request the 1st letter depending on Ltd's CT situation, but in all cases they must request and have received the 2nd clearance letter from MVL clearance team (the one letter) which will either flag any irregularities (CT, VAT, PAYE) and object or confirm all good/no objection to Ltd closing. Do I read your post correctly in this regard?

Ummm...I wasn't really saying that, but equally I wouldn't say what you've typed is wrong. If a liquidator gets clearance from the HMRC MVL team, then they'll likely be happy to close irrespective of whether they've heard separately from the CT department or not. In theory though this could happen in a situation where HMRC have challenged a CT return, ie aren't comfortable with the figures submitted...but the HMRC MVL team will simply see that the return was submitted and the liability disclosed on it was paid. This is likely to be fairly rare though.

In practice at the moment HMRC are so under the cosh (all departments, but most notably the MVL clearance team) that liquidators are often having to make judgment calls, without having all the clearances they'd ideally like. It's not viable to a liquidator firm as a business in their own right to keep cases open forever, potentially holding some client funds forever, because an HMRC department isn't responding. Therefore at some point the liquidator will likely decide to finalise things irrespective of what they've received, on the basis HMRC have had plenty of time to flag problems, haven't done so, hence doesn't seem too unreasonable to assume that means there aren't any.

[oleanderwand]

All a liquidator means when they talk about "getting HMRC clearance" is getting a letter (ideally two letters) from HMRC confirming HMRC are happy the company's tax affairs are tidy, nothing's due, so they're happy for the liquidator to finalise the case, killing off the company.

Thanks Maslins. So in practice (not specific to MVLOnline. MVLOnline is on my list of preferred liquidators by the way, though I haven't decided who I will go with) liquidators may not need to request the 1st letter depending on Ltd's CT situation, but in all cases they must request and have received the 2nd clearance letter from MVL clearance team (the one letter) which will either flag any irregularities (CT, VAT, PAYE) and object or confirm all good/no objection to Ltd closing. Do I read your post correctly in this regard?

[Maslins]

Maslins how does HMRC provide clearance in MVL, if you don't mind me asking? Do they send it as 1 clearance for all taxes/paye or does the liquidator have to request (and subsequently will receive) separate clearance for each category? I am planning to MVL my Ltd, have read the information on this website and forum (what a fountain of knowledge!), but I am still unclear regarding the clearance. Sorry if I jump in to this thread, I am newbie here but thought it is better to post in this relevant thread instead of opening a new one. Thanks in advance.

We write to two separate departments:
1) the normal corporation tax department. They'll sanity check not only that all corporation tax returns are submitted and liabilities paid, but also that there aren't any open enquiries into CT periods, and that they don't intend to open any.
2) a specific MVL related clearance team. They look across all company taxes (CT, VAT, PAYE), and hopefully confirm that they're happy all expected returns have been submitted across all taxes, and all liabilities paid.
It's the latter department which pretty much fell apart when Covid first hit, and hasn't recovered. This is why liquidations are now taking 6+ months to complete (I'm hearing some stories of 12+ months), whereas historically it's generally been more like 3-4 months.

All a liquidator means when they talk about "getting HMRC clearance" is getting a letter (ideally two letters) from HMRC confirming HMRC are happy the company's tax affairs are tidy, nothing's due, so they're happy for the liquidator to finalise the case, killing off the company.

[Lance]

thin out the herd

[oleanderwand]

Maslins how does HMRC provide clearance in MVL, if you don't mind me asking? Do they send it as 1 clearance for all taxes/paye or does the liquidator have to request (and subsequently will receive) separate clearance for each category? I am planning to MVL my Ltd, have read the information on this website and forum (what a fountain of knowledge!), but I am still unclear regarding the clearance. Sorry if I jump in to this thread, I am newbie here but thought it is better to post in this relevant thread instead of opening a new one. Thanks in advance.

[Maslins]

Maslins Sorry to hijack this thread. So you are saying regardless of the status of the liquidation, as long as the funds have been distributed to me I can claim BDAR (ER) and continue to wait for HMRC to sign off which only effects my company tax position?

The HMRC clearance liquidators generally apply for has nothing to do with personal tax. The distributions will be taxable on you personally based on date of distribution, irrespective of whether the liquidation has finalised.

[Lance]

Maslins Sorry to hijack this thread. So you are saying regardless of the status of the liquidation, as long as the funds have been distributed to me I can claim BDAR (ER) and continue to wait for HMRC to sign off which only effects my company tax position?

BADR!!!!