Another MVL new company question

[Maslins]

I believe there is nothing to stop me opening a new LTD. Could I just inform HMRC and pay the appropriate tax on the LTD closure?

If you're happy to accept the distributions from the liquidation would now be taxable on you as dividends rather than CGT, yes. Go ahead, nothing illegal, but the MVL won't have saved you any tax.

If you're not happy to accept that and still want the CGT treatment, see jamesbrown's comments. You'd need to try arguing your case, and/or hope HMRC simply didn't notice/pick the fight. I have zero clue whether you'd win or not!

[DGA]

Thanks for the advice.

would be happy to go brolly and put all into LTD pension if possible, didn't realise I could use a brolly and not take salary.

I have already asked MVL online about distribution.

like I said putting as much into existing LTD pension and not withdrawing salary would be perfect

[jamesbrown]

I can't see how you can evidence it. Timing right around the legislation changes, rafts of others doing it for the same reasons, contractors perception that there will be no outside gigs, which we've seen time and time again on here. Even if the reason was 100% genuine it HMRC aren't going to be able to see the wood for the trees. They've got all the evidence of how many others did the same and the OP will just fall in with that lot. Standing up in front of HMRC and saying he did it because the market was dead but he's got another outside gig in his hand won't wash. I personally don't see how this is a grey area. If it were then every case where a contractor thought the market had imploded and got out would be grey but (IMO) this legislation was created and worded in such a way to cover that exact situation.

I believe, this, and all the others where contractors MVL'd that close to the legislation change, is Condition C to the letter.

You can quite easily evidence your intention to retire or go permie, as distinct from your intention to reengage in the same trade within a week from closing your last company. As to whether that is enough to avoid the TAAR is untested. Obviously, you are not going to breach the TAAR if you retire and then accept an hour of work that is related to your old trade or if you engage in a similar trade within a day short of two years from the last distribution, so there is quite obviously a position that can be argued. As to what arguments may or may not be accepted by a tribunal, that is hard to say and so it is better to be conservative.

[northernladuk]

Regardless, this is in the grey area w/r to the TAAR and what is acceptable. If you can evidence that you had no intention of re-engaging in the same or a similar trade or activity within two years of the last distribution, then you are potentially OK, but HMRC may take a different view.

I can't see how you can evidence it. Timing right around the legislation changes, rafts of others doing it for the same reasons, contractors perception that there will be no outside gigs, which we've seen time and time again on here. Even if the reason was 100% genuine it HMRC aren't going to be able to see the wood for the trees. They've got all the evidence of how many others did the same and the OP will just fall in with that lot. Standing up in front of HMRC and saying he did it because the market was dead but he's got another outside gig in his hand won't wash. I personally don't see how this is a grey area. If it were then every case where a contractor thought the market had imploded and got out would be grey but (IMO) this legislation was created and worded in such a way to cover that exact situation.

I believe, this, and all the others where contractors MVL'd that close to the legislation change, is Condition C to the letter.

[jamesbrown]

The SATR just reports what happened and claims BADR on the capital distribution (or not). Obviously, the OP could decide not to claim BADR, but it still would've been a capital distribution from the MVL in the first instance, subject to ordinary rates of CGT, which is less than dividend tax. The OP could decide to reclassify them as dividends and pay all outstanding tax too.

Regardless, this is in the grey area w/r to the TAAR and what is acceptable. If you can evidence that you had no intention of re-engaging in the same or a similar trade or activity within two years of the last distribution, then you are potentially OK, but HMRC may take a different view.

[Lance]

Not sure that's any use is it? The distribution has happened so must be declared surely. The two years starts from the date of the distribution whether it's on his SATR or not?

As LTD isn't an option wouldn't just going brolly and sticking it all in a pension be much more efficient?

I'm pretty sure that the distribution date isn't declared until SATR. Companies house will know the company has gone but that's a different date. HMRC will have allowed the liquidation, but that's before the distribution date.

And you cannot claim BADR or pay CGT/Dividend tax till after SATR can you? So I assume that is when it is declared.
IANAL


or.... the OP could ask the MVL practitioner who dealt with the closure.

[northernladuk]

if you closed it a year ago then you have not done SATR yet so not declared the distribution as anything.

Not sure that's any use is it? The distribution has happened so must be declared surely. The two years starts from the date of the distribution whether it's on his SATR or not?

As LTD isn't an option wouldn't just going brolly and sticking it all in a pension be much more efficient?

[Lance]

Closed the LTD a year ago via MVL to take a perm job. Have now been offered ad hoc (2 -5 days per month) contractor work (outside IR 35) which I can do on a weekend / evenings etc.

Plan would be to build up funds in the LTD and not withdraw a salary / dividends (maybe pension contributions).

I believe there is nothing to stop me opening a new LTD. Could I just inform HMRC and pay the appropriate tax on the LTD closure?

Appreciate any advice

if you closed it a year ago then you have not done SATR yet so not declared the distribution as anything.

[DGA]

Closed the LTD a year ago via MVL to take a perm job. Have now been offered ad hoc (2 -5 days per month) contractor work (outside IR 35) which I can do on a weekend / evenings etc.

Plan would be to build up funds in the LTD and not withdraw a salary / dividends (maybe pension contributions).

I believe there is nothing to stop me opening a new LTD. Could I just inform HMRC and pay the appropriate tax on the LTD closure?

Appreciate any advice