MVL – Member Voluntary Liquidation and IR35
From 6th April 2020, IR35 will become legally bound on Contractors who operate through their own Limited Company. Contractors can either join the payroll of their end-users or join an off-payroll PAYE. Both Options will require contractors to close their Limited Company.
If you have large sum of cash in your business account, i.e. over £25,000 then Member Voluntary Liquidation [MVL] is the best route to extract your money in the most tax efficient manner.
How We at Asmat & Co – Can Assist You
In normal circumstance if you withdraw large sum of funds from the company you will fall in high tax brackets resulting in 30% to 35% tax. Under Member Voluntary Liquidation [MVL] route We would appoint an insolvency Practitioner who will distribute your money to you after all outstanding taxes had been paid. Under normal circumstances you would have to pay tax at 18% or 28% capital gains tax however with MVL you could only pay 10% on your assets as we would utilise Entrepreneur Relief. All Company Accounts submissions and Calculations for the MVL will be carried out by Asmat & Co and will liaise with Insolvency Practitioner throughout the filing process of the MVL.
Below is the step-by-step process of what is involved:
- Appoint a Insolvency Practitioner [IP] who is send out forms for you to sign
- Accounts prepared and submitted to HMRC and Companies.
- Liquidator advertises on Companies House and creditors submit claims.
- HMRC requests to pay any outstanding CT, PAYE and VAT.
- Companies Funds transferred to liquidation estate account.
- Approximately 75% paid as an initial distribution.
- Tax clearance received
- Remaining funds are transferred to your account
- Final documents filed to Companies House
- Company Struck Off
You would then need to declare your distributions in your Self-Assessment.
We are here to assist you through the MVL process from start to finish as we closely work with the Insolvency Practitioner
For FREE CONSULTANCTION RING US ON:
Landline: +44 1753 424968, +44 2035 988621
Mobile: +44 7896 531706 (whatsapp)