Purnells Insolvency Practitioners © All Rights Reserved.
Contact Us On: 01633 214712
E-mail: suzi@purnells.co.uk
What is a Members Voluntary Liquidation?
A Members Voluntary Liquidation (MVL) is a "Solvent Liquidation" (ie, where all creditors can be paid in full) and there is a surplus of money which would then become available to the shareholders.
What are the tax benefits of a Members Voluntary Liquidation?
Within an MVL, all distributions made to the shareholders are classed as "Capital Distributions" and therefore attract tax on the individual shareholder at either the Capital Gains Tax rate, or the lower Entrepreneurs rate. Dividends to shareholders outside an MVL would attract personal tax at the much higher income tax rates.
Why would I place my company into a Members Voluntary Liquidation?
Should the available assets within the company exceed £25,000, then the company must be placed into a Members Voluntary Liquidation in order to gain the tax advantages mentioned above.
What is involved?
With the help of Purnells, we would hold both a Directors and a Shareholders meeting to place the company into an MVL.
Once appointed as Liquidator, we would collect in/realise the company assets and ensure all creditors are paid in full.
The most important aspect of an MVL is obtaining "Formal Clearance" from HM Revenue & Customs in relation to PAYE, VAT and Corporation Tax.
During the Liquidation we would arrange for all outstanding returns to be submitted to HM Revenue & Customs and once they had received payment in full, we would then request their "Formal Clearance".
Once that Clearance has been obtained, it is effectively HM Revenue & Customs confirmation that they are satisfied that all matters are concluded and (more importantly) that they will not be undertaking an investigation in the financial dealings of the company, ie they are "closing their file" on the company. Hence, you can be satisfied that no queries will be raised by HM Revenue & Customs at any time in the future.
What is the cost?
Ultimately the cost of the Liquidation would be based on the amount of work needed to be done. In other words, should all of the assets have been realised and most of the creditors paid prior to placing the company into Liquidation, the cost would be very much reduced.
Call Suzi on 01633 214712 or e-mail suzi@purnells.co.uk to arrange a free meeting (which can take place either in person or on the telephone) or if you would just like to have a quick discussion to clear any queries that you may have. Alternatively, click on the link below to complete our on-line contact form.