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Closing Company with £60K in the bank

Closing company

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I would like to ask experienced Accountants who are willing to share their knowledge what is the proper procedure of closing a company with over £60K in the bank. All debts for the company are paid including all taxes, the PSC is owned by a qualifed Accountant who has been doing some freelancing in the City and now wants to close the company for good because of IR35 rules.  What is the proper procedure to close such a company as the person has no experience in that area and wants to pay very minimum tax.  What is the correct procedure as the money is over £25K and the next year end for the company is 31/03/2020, she was thinking of transferring all the cash to herself ashe director as capital distribution, close the bank account and then inform HMRC. Is this the correct procedure?

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Psycho
By Wilson Philips
26th Jan 2020 23:33

It is a ‘correct’ procedure but probably not the most tax-efficient. I would suggest that paid-for professional advice is in order. Only when all circumstances are known can the best route be established.

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By NH
27th Jan 2020 06:58

you probably need to look at an MVL, seeking professional advice is advised

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By lincolnartist
27th Jan 2020 07:00

£60k in the bank, wants free advice......

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Replying to lincolnartist:
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By atleastisoundknowledgable...
27th Jan 2020 08:01

lincolnartist wrote:

£60k in the bank, wants free advice......

... refers to herself in the third person...

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Replying to atleastisoundknowledgable...:
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By lincolnartist
27th Jan 2020 10:42

Arguably an even worse sin

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Replying to lincolnartist:
Psycho
By Wilson Philips
27th Jan 2020 12:33

lincolnartist wrote:

... wants free advice......


That’s how they’ve got £60k in the bank.

(Although if they’d paid for advice they may have had more than £60k)

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Replying to Wilson Philips:
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By FRAS
27th Jan 2020 14:14

Thank you Wilson Philips but remember the business is owned by a qualified Accountant just like you but with no experience of closing businesses but with the right skills to run own business. The reason why we have this platform is to share ideas and point each other in the right direction.

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By atleastisoundknowledgable...
27th Jan 2020 08:01

MVLOnline.co.uk

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Lisa Thomas
By Insolvency Practitioner
27th Jan 2020 09:45

An MVL might be the better route and if the client can claim entrepreneurs relief it may also be the most tax efficient.

They will need a licensed Insolvency Practitioner for an MVL.

Based on £60k it will cost about £2.5-£3k plus VAT (VAT is usually recoverable if Co. was VAT registered) for Liquidators fee and expenses, usually mitigated by the entrepreneurs relief..

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Replying to Insolvency Practitioner:
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By FRAS
27th Jan 2020 14:02

Thank you for this we will definitely get an Insolvency practitioner

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Replying to Insolvency Practitioner:
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By FRAS
27th Jan 2020 14:02

Thank you for this we will definitely get an Insolvency practitioner

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Replying to FRAS:
Lisa Thomas
By Insolvency Practitioner
27th Jan 2020 14:11

Let me know if you need a quote from me.

Thanks

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By bernard michael
27th Jan 2020 10:16

Why close it immediately? By the sound of it there is no urgency in that the company appears to now be dormant. Explore the possibility of taking the money out over 3 years as dividends as an alternative strategy

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Replying to bernard michael:
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By FRAS
27th Jan 2020 14:17

The company is no longer needed as the business owner is now permanently employed with a salary £80K and she also have 2 buy to let properties with net profit of £10K per year so even if she takes dividends every year over 3 years her tax bill will be very high.

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