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When you own your own limited company, the thought of giving it up can be daunting.

But if you have recently come out of contract, are planning to retire soon or are returning to permanent employment there are a variety of ways to close down your company and it’s important to seek expert advice to ensure the best solution for you. 

The proposed April 2021 IR35 reforms have seen a large increase in those looking to wind up their limited companies and many have chosen us to assist them, taking comfort that their hard earned capital is being dealt with by a reputable firm.

As a contractor, one option you could consider is a members’ voluntary liquidation. Our dedicated ContractorMVLs service is specifically designed to meet the needs of contractors.

How members’ voluntary liquidations work

A members’ voluntary liquidation (MVL) is a voluntary liquidation process by a solvent company allowing the shareholders to obtain the value of the business in cash and instead of being charged income tax on the funds a capital gains tax could be applied instead.  This is subject to a wholesale review of the capital gains tax regime which was announced on 14 July 2020 and contractors wishing to have their liquidation treated within the existing regime may need to move quickly.

Benefits for you and your company

Our ContractorMVL service is led by Restructuring Partner and licensed insolvency practitioner Donald McNaught. The team will take the time to assess your objectives before offering the best solution for your needs. Many contractors can find themselves in more complex tax positions due to working overseas. In these instances, our ContractorMVL team will draw upon the knowledge and expertise of our international tax experts to come up with a tax efficient strategy tailored to you.

With tax legislation continually changing it’s important to seek early and up to date advice about the tax and other implications of a members’ voluntary liquidation.

Beyond any tax implications a liquidation also offers other significant benefits, mitigating any risks as a director and drawing a line in the sand with potential creditor claims.  If a company is struck off without first being liquidated a director is exposed to personal liability if claims later arise.  By comparison, in a liquidation claims are invited providing more certainty thereafter, particularly where a director is concerned about legacy issues.

How we can help

Our team are on hand to help and advise. If you've got a question or would like to arrange an initial chat, please drop an email to our dedicated mailbox: mvl@jcca.co.uk and a member of our team will be back in touch shortly. 

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