FWIW, you can deregister for VAT if you’ve stopped trading and before you sell the assets to avoid having to pay VAT on those sales BUT, there is a threshold, over which you would be required to account for VAT on your final return anyway.
Unless you have a lot of expensive assets you should be able to do this. The threshold is £1k of VAT, or standard rated assets with a net value if £5k or less.
https://www.gov.uk/government/public...tion#section-7
When I started my MVL, I made a list of the capital assets (the usual stuff, a PC, expensive office chair, iPhone and also the office air con unit), worked out the fair market value based on second hand values, ran them past my accountant, documented the proposal to sell them to myself at those prices in a minuted company meeting and then once I had deregistered for VAT I raised an invoice.
Because I needed a nil directors loan account before I could start the MVL I actually paid the money to the company bank account - it didn’t take long to get it back after the MVL was started.
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Previously on "What happens to business assets when closing company by MVL?"
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Originally posted by northernladuk View PostYep same problems at NW.
Originally posted by northernladuk View PostNot hassle to sell as you are selling it to yourself.
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Yep same problems at NW.
https://forums.contractoruk.com/acco...-williams.html
https://forums.contractoruk.com/acco...-williams.html
Just have to keep banging away at them to make sure they do it in a reasonable timescale.
if there is an asset that it's going to be more trouble to sell than its worth, what the threshold for assets that need accounting for is
But yes, NW will give you a view on the practicalities of it.
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Originally posted by northernladuk View PostSJD? If it is go in very hard from the start.
Originally posted by northernladuk View PostKeep on top of it, they won't do it if you just sit back and wait.
Originally posted by northernladuk View PostDon't be dicking around at this point.
Originally posted by northernladuk View PostThis is true but the company owning assets and getting rid of them before they close is as obvious as it comes I would have thought.
Appreciate the advice, thank you!
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Originally posted by n1234 View PostYou're absolute right of course – if I weren't looking at winding up my company soon, I'd definitely be looking to change accountant, but there doesn't seem to be much point for a few more months. As it is I all I can do is keep chasing, and perhaps escalate. They (one of the big ones) were alright up until recently, seems like the staff are recently really over-stretched. Not ideal!
Even if it's not them it could be one of the others the same venture guys own so will be the same situation. Keep on top of it, they won't do it if you just sit back and wait.
Got it, thanks. Is there therefore an advantage to deregistering from VAT before selling the items, as I wouldn't have to pay VAT, or does it not work like that?
Makes sense! Apologies if it was a stupid question – a lot of stuff which seems obvious with running a company isn't always so...
Just be very clear in your head the company and you are completely separate entities. Company money, your money and company assets, your assets and so on. A process needs to be followed to get one over to the other. Keep that in mind and many little things should become a little clear.Last edited by northernladuk; 29 October 2021, 10:21.
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Depends. For example, if any of those assets benefited from the super-deduction, you’ll need to account for that with a balancing charge for any disposal that takes place before 1 April 2023. Regarding VAT, you would normally charge VAT at the appropriate rate on the sale of an asset unless the business is a going concern (it isn’t). Best to let your accountant handle it; that’s what you’re paying them for.
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Originally posted by Maslins View PostIt amazes me how often we see comments like this on the forum. If this is the case, your company doesn't have an accountant. You're giving money to a third party for no reason, and having to figure out your own accounting stuff. Give them grief, don't just accept this as ok/normal, it's not.
Originally posted by Maslins View PostOtherwise, what eek said. Assuming your company's still VAT registered, it will charge you VAT on the sale price of any items you buy from it. It will also most likely suffer CT on the net amount (I say this as it's more than likely you got full CT relief in year of purchase).
You look on eBay to get current market value - print out the evidence and pay the company.
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Originally posted by n1234 View PostI have also asked my accountant but they have been useless with response times of late, so I thought people here might have some advice.
Otherwise, what eek said. Assuming your company's still VAT registered, it will charge you VAT on the sale price of any items you buy from it. It will also most likely suffer CT on the net amount (I say this as it's more than likely you got full CT relief in year of purchase).
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You look on eBay to get current market value - print out the evidence and pay the company.
this really isn’t difficult
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What happens to business assets when closing company by MVL?
I’m looking for a bit of information about what happens to my business assets if I want to close my limited company by a MVL (as I’ve stopped contracting). I have also asked my accountant but they have been useless with response times of late, so I thought people here might have some advice.
In a nutshell: if my company has purchased assets which I personally might like to keep after it is closed (e.g. computer, bike), I understand that I personally would need to purchase these from my company? How is a fair price decided if so, I assume the age of the item affects this? Obviously I’d like to pay as little as possible, but I’m not looking to do anything I couldn’t reasonably defend if someone looked into it!
Does the fact that VAT was claimed back on some assets affect this - that is, do I also need to pay back the VAT?
If there are assets that I don’t want to keep, do I have to sell them? Or can I give them away? Selling some items is probably more hassle than it’s worth! Is there an age threshold beyond which items have no value or some other option to “write them off”?
Any input or links appreciated!
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