The demise of C16 - an opportunity?
As most of us know, extra statutory concession C16 is on its last legs and will probably be replaced by legislation which (HMRC propose) will be exactly the same except that final distributions will only be taxed as capital gains if they are £4,000 or less. Apparently £4,000 is the typical cost to a small company of appointing a liquidator and going through a formal winding-up. Obviously they think that any company with more than that can afford to go down the liquidation route. It's also coincidentally the same amount that the Crown won't bother to chase if the share capital is re-paid.
Assuming this law goes through as proposed, it opens up an interesting possibility. Could it be worth accountants getting an insolvency license in order to specialise in those SMEs who will now be forced to wind-up rather than pay shedloads of tax on a final dividend?
I must confess, I don't know a lot about insolvency, but I assume there isn't much to it apart from a creditors meeting, advertising in the Gazette, drawing up a list of assets, chasing anyone who owes money, paying off the creditors and making sure no-one has taken money from the company illegally. For a sole owner/manager who just wants to get rid of his company and take the remaining cash as tax efficiently as possible, I would imagine this would be a straightforward process, almost a case of going through the motions.
Insolvency practitioners will charge an arm and a leg for this. We could do it for a fraction of the cost without too much work or risk for a one-man company. The only problem I can foresee is all those people who pay themselves illegal dividends, and what to do about them.
But what are the requirements for an insolvency license? Do you need any special qualifications? How much will the PII be? Would it be worth it just to cherry pick the easy jobs? There are bound to be loads of those so it sounds like a good opportunity to me. Would be interesting to know what others think, especially existing IPs.
- Legal title not in the company name 303 11
- Companies Made Simple Dashboard? 197 2
- Employment Allowance 240 3
- simple one...capitalisation of legal fees on purchase of business 160 4
- CIC Company 526 7
- Have I dropped a major clanger? 1,351 21
- VAT online filing exemptions 294 4
- Has anyone read the implications of the Lisbon treaty? 872 18
- NALS Accountants Report 126 1
- Do I need to report this to SOCA 3,486 35
- Dividend dates 577 10
- Sole properietor 206 4
- transitioning payroll 259 8
- dividend proposals 141 2
- How to reclaim VAT that was missed off previous invoices? 250 2
- Deduction from Salary 318 8
- PPR exemption - can it be due on a bigger area than 0.5 hectares? 214 2
- Can I take action against my accountant for incompetence? 2,756 60
- Child Tax Credits - date of cessation of qualifying young person 101 2
- VAT on sales net of CIS suffered 443 10
- Property exchange - 8-year legal delay following fall-out 625
- Cancelled 365
- SAGE Payroll Data for Import to MS Dynamics AX 345
- Cancelled 313
- Have you staged yet for auto enrolment? 284
- Probiz 274
- Free-standing washing machine - unfurnished lettings 235
- VAT on non-profit making clubs (ECJ VS West Dorset Golf Club) 231
- Phishing emails purporting to be from CIPFA? 206
- Is this UK incapacity benefit taxable in UK or Jersey? 177