Updated: 13th January 2020
Published: 2nd December 2019
As the UK’s leading business recovery practice; we are specialists in Members’ Voluntary Liquidations (MVLs) and provide advice to accountants, professional advisers, and directly to business owners. Our comprehensive MVL service includes:
A Members’ Voluntary Liquidation is a liquidation procedure which is a tax efficient way to close a solvent business and extract assets. A business is classed as solvent if the assets outweigh liabilities and the company is able to pay creditor debts within 12 months of them falling due. An MVL is a formal procedure carried out by a licensed insolvency practitioner appointed by shareholders.
The appointed liquidator will ensure that any outstanding liabilities have been settled and clearance has been granted by HMRC to close the business. An MVL allows you to extract funds in a cost-efficient manner as this will be treated as capital, rather than dividends. In terms of members voluntary liquidation tax, you may be able to claim entrepreneur’s relief on extracted funds which means that only 10 per cent capital gains tax will be payable.
Company liquidation costs can vary, however, it is important to ensure that a licensed insolvency practitioner is appointed to administer the MVL. Fees relating to the MVL process consists of disbursements which are necessary costs relating to essential notices which will be issued during the liquidation process.An IR35 MVL can help you make a tax-efficient transition ahead of April 2020. More details have been released on the measure following a public consultation which invited industry leaders to submit their feedback.
Although the IR35 assessment process remains the same, the responsibility of determining employment status will be shifted to the end client, assuming they are not a small organisation of less than 50 people. If assessed correctly, you should receive the same results post-April 2020 as you would today. The further finer details of the measure are expected to be announced early summer 2019.
If you would like any advice on the MVL process and how to liquidate your limited company ahead of the IR35 private sector reform, our licensed insolvency practitioners can help. Call our experts on 0800 644 6080 to arrange a free consultation at any one of our 78 Offices, your home or business premises.