pre IR35 Company account surplus

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dinosaur replied

30 May 2021, 20:41
Thanks James that's really helpful...very much appreciated.
I'll look into the details of MVL, and weigh things up.
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jamesbrown replied

30 May 2021, 12:48
Originally posted by dinosaur View Post

thanks James!
I'm more or less resigned to be stuck in IR35 for good, so will probably look at the options for eventually closing the company down.
It's approx £50k still in account.

In that case, it's probably worth considering an MVL (i.e., closure with capital treatment of the retained funds). But. But. But. You really should think carefully about this because you won't be able to open a new company engaged "in the same or a similar trade or activity" within two-years of receiving the final capital distribution without forfeiting that capital treatment. So you've got to be pretty sure you aren't coming back to contracting outside of IR35 for 2-3 years (2 from the final distribution), otherwise you'll be continuing with a brolly.
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dinosaur replied

30 May 2021, 11:12
thanks James!
I'm more or less resigned to be stuck in IR35 for good, so will probably look at the options for eventually closing the company down.
It's approx £50k still in account.
Leave a comment:
jamesbrown replied

30 May 2021, 10:58
There are probably wrong answers to this question, but not really any right answers. Depends entirely on your circumstances. For example, if you expect to get work outside IR35 in the reasonably near future, it could make sense to retain the company and its funds, otherwise consider a striking off (< £25k) or MVL (>> £25k). Not much point in taking a dividend unless you need it (because, yes, you can potentially use it more efficiently in future), but if you need it, take it.
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dinosaur started a topic pre IR35 Company account surplus

30 May 2021, 10:52
pre IR35 Company account surplus

Apologies, if this has been asked elsewhere....
I've been trawling around but haven't found anything...

Just curious what ex-limited company contractors were doing with funds built up in their limited co bank accounts
pre-April 2021 when IR35 took over?

I'd already maxed out my annual SIPP contributions for 19/20, and am using the "salary sacrifice" on my IR35/Umbrella arrangement to
maximise contributions for this financial year.

Is it better just to take a big dividend or just leave the cash "resting"?

(My accountant isn't particularly good for advice on such matters)

thanks
J
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