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VAT on liquidation

Hi all!

Thanks for taking the time to read this.

A client has gone into liquidation and we have been contracted by the liquidator to compute the final VAT returns.

Are there any areas I should be aware of other than standard VAT return production when a company is in liquidation?

Any help is greatly appreciated,

Coeus,

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Just a couple of things

There are no issues, transaction-wise, in preparing the returns, which you wouldn't normally consider when preparing returns for other clients.  However, there are a few things that, if you're not already aware of them, you should know.

Any returns completed after a liquidator has been appointed are signed by the liquidator, not the/a director.  This is regardless of what VAT period the return relates to.

A new VAT period starts on the day a company goes into liquidation.  Therefore the final return should be prepared up to (and including) the day prior to the company went into liquidation. 

If the final return show a payment due to HMRC it doesn't get paid over as that liability will form part of HMRC's claim in the liquidation. 

 

I hope that this is helpful.

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Vat on Liduidation

Before you do anthing get an undertaking or guarantee that you will be paid-advise likely cost up front-no guarantee- no work done

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Thanks for the replies!

 

The financial side of the work agreement is settled - fees are covered.

 

I am fairly verse in most VAT issues including VAT cessation which I have completed a few de-registrations with no issues.

 

I am a little rusty however on liquidation requirements - as you say crazymoo if no different from VAT deregistration then no issue.

 

Just wanted a second opinion to make sure no other VAT issues to be aware of.

 

If you do think of anything please let me know!

 

Cheers,

Coeus.

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Specific problem areas

Two particular areas need careful consideration.

1.   Transfer of a going concern (TOGC) - a liquidator, to maximise funds available to creditors, will endeavour to sell off the assets at the highest possible realisation value.  The proceeds may or may not be liable to VAT - look carefully at TOGC rules depending upon the particular circumstances (it is NOT always clear cut).

2.   Land and buildings - check if opted to tax or if constructed in recent years or are "Capital Items" within the Capital Goods Scheme rules.  Careful consideration of the sale of such assets is necessary from a VAT viewpoint.

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Input VAT on liquidation costs

A company is going into Voluntary liquidation, is it able to claim input VAT on fees paid to liquidators?

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VAT on Liquidation

Our client is in Voluntarily liquidation.  The Liquidation  cost  includes VAT. 

Can cleint claim VAT back on this?

Should the fee shown in accounts Gross or net?

Thanks.

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