Starting a New Limited Company 2 Months After Closure

[Fred Bloggs]

As long as there's been no tax advantage when the previous company was struck off, there's no reason at all to not start a new company. It's really easy to do on line. The last time I did it, I had the registration certificate and articles as a pdf within maybe 30 minutes of setting the company up at Companies House.

[jamesbrown]

Could this also apply if capital distribution was less than £10k I.e HMRC then viewing that as dividends and taxing me accordingly?

Why would anyone formally liquidate a company to distribute 10k as a capital distribution? I highly doubt you did that. You probably filed a DS-01.

[Maslins]

Could this also apply if capital distribution was less than £10k I.e HMRC then viewing that as dividends and taxing me accordingly?

No, assuming you just struck the company off (rather than doing a formal MVL).

If you strike your company off, these anti avoidance rules don't apply. Typically strike off would be sensible if final net assets are sub £25k. It would qualify for capital gains treatment, and may/may not qualify for BADR.

If final net assets are over £25k, and you struck your company off, final funds would be taxed as dividends. The reason why many people put their company through an MVL where final net assets are over £25k is that then leads to capital gains tax treatment (which also may/may not qualify for BADR). THIS is where the anti avoidance rules can then bite, if you do an MVL then restart within 2 years.

[ziggystardust]

The impact of the rules would be to stop the distributions being capital gains for tax purposes. Instead they'd be taxed as dividends.

Could this also apply if capital distribution was less than £10k I.e HMRC then viewing that as dividends and taxing me accordingly?

[Maslins]

The phoenixing rules relate to using Business Asset Disposal Relief (was known as Entrepreneurs' Relief) which is only the case if you claimed it and the capital distributed was over £25,000.

Agree on the second bit, so OP you're fine.

Pedant hat on, first half of quoted sentence isn't correct. BADR can apply to distributions sub £25k that you got from a cheap and cheerful strike off. OP's situation was apparently £10k so quite possibly covered by annual exemption anyway. Anti phoenixing rules only kick in for formal liquidations/MVLs, which in practice someone would only sensibly use if final net assets were above £25k...but BADR is a red herring, anti phoenixing could kick in for >£25k distributions even that didn't qualify for BADR. The impact of the rules would be to stop the distributions being capital gains for tax purposes. Instead they'd be taxed as dividends.

[jamesbrown]

Agree with eek, although the TAAR concerns a capital distribution, rather than BADR, which merely further reduces the tax due (personally). If you struck off the company without a capital distribution, there is nothing to stop you.

[eek]

I went through closure of my Limited company ahead of securing an Inside IR35 contract via an Umbrella, as I did not envisage getting anymore outside contracts for the foreseeable future, with dissolution completing in February this year.

Now my contract has ended and I have been approached by 3 separate agencies offering decent Outside IR35 gigs. I understand that phoenixing rules dictate that I could draw the attentions of HMRC but would there be repercussions from doing this? I do not have any assets and the capital distributed was under £10k. I genuinely expected that, with all the changes coming into force with IR35 legislation that I would not secure another Outside role.

Is it too much of a risk to open another company again, should I go through trying to re-open my recently dissolved company or suck it up and wait until an inside role comes up? I am also not sure what the implications would be from an income tax perspective .

The phoenixing rules relate to using Business Asset Disposal Relief (was known as Entrepreneurs' Relief) which is only the case if you claimed it and the capital distributed was over £25,000.

I will wait for Chris Maslins to reply and confirm but I don't think you have anything to worry about.

[ziggystardust]

I went through closure of my Limited company ahead of securing an Inside IR35 contract via an Umbrella, as I did not envisage getting anymore outside contracts for the foreseeable future, with dissolution completing in February this year.

Now my contract has ended and I have been approached by 3 separate agencies offering decent Outside IR35 gigs. I understand that phoenixing rules dictate that I could draw the attentions of HMRC but would there be repercussions from doing this? I do not have any assets and the capital distributed was under £10k. I genuinely expected that, with all the changes coming into force with IR35 legislation that I would not secure another Outside role.

Is it too much of a risk to open another company again, should I go through trying to re-open my recently dissolved company or suck it up and wait until an inside role comes up? I am also not sure what the implications would be from an income tax perspective .