Limited Company Closure Route

[WordIsBond]

In the OP's case my understanding is that the risk of reclassifying as dividends is minimal hence my comment 'no problem in returning to contracting'

Having been fair, I want to go back to your comment that triggered the disagreement. This is what you said:

The £11K CGT allowance applies to each shareholder so there will no need to claim ER with your wife as a shareholder.

Will be no problem coming back to contracting as ER not claimed.

Just two points here:
1. There was no "this is my understanding" disclaimer, you were stating it with certainty as a fact. Thus, the criticism by Maslins was entirely warranted.
2. Your final sentence was a nonsense. If there is no problem coming back to contracting, it is NOT because ER is not claimed, but because of the substance of the case. The claiming of ER, or not, is irrelevant to the question. It is the decision to take the funds as capital gains, rather than as dividends, that creates any potential risk here. That option is available without ER because of the small amount, but it does not eliminate the risk that if HMRC decide you did a winding up just to take profit as capital, rather than as dividends, they will challenge it. The use or non-use of ER is irrelevant to that problem.

[SueEllen]

no a bit faster in the south from what I understand

Depends where you live in the South including London....

[biztalk]

Apologies guys
But I kinda feel like my thread is hijacked !
I am already confused what I should do and now some one posted the exact scenario and confused me even more !!!
My scenario is totally different than the other OP! I have approx 100K while the other OP has less than 25K

[Scruff]

I am pretty sure that you have been advised to "ask your accountant"? If you don't trust his/her advice, change, and pay for specialised Taxation Counsel. Your radiators need bleeding, BTW.

[TheFaQQer]

the pros need to be held to a higher standard because they're more likely to be listened to.

Based on UKCA's posting history, you don't need to hold them to a higher standard.

[john@UKCA]

Yes.

It was foolish to say there is no risk (anyone want to bet this "accountant" that has started posting here isn't ICAEW?),

What's ICAEW? is that some sort of International Coalition Against Enforced (contractor) Workers.

Please send link so that to I can join

[john@UKCA]

I don't want to be rude but are you really expecting to run business under this brand? It's..erm... Not going so well for you so far.. :

I dont mean to be rude either - but really what would you know.

[northernladuk]

I dont mean to be rude either - but really what would you know.

Well as a contractor and therefore a potential customer I'm not really feeling it.

[john@UKCA]

To be fair, JB, "UK Contractor Account" was responding at that point to someone other than the OP, and it was a distribution well under £25K, probably under £10K, in view.

its so small that it doesnt even need to be shown on a Tax Return - so how would HMRC even know he had received a capital distribution?

So the risk is zero or close to zero as can be.

Same risk as anybody in the UK submitting a Tax Return to HMRC.

Unless he has a 'stash' in an undisclosed offshore bank account.

[john@UKCA]

Having been fair, I want to go back to your comment that triggered the disagreement. This is what you said:

Just two points here:
1. There was no "this is my understanding" disclaimer, you were stating it with certainty as a fact. Thus, the criticism by Maslins was entirely warranted.
2. Your final sentence was a nonsense. If there is no problem coming back to contracting, it is NOT because ER is not claimed, but because of the substance of the case. The claiming of ER, or not, is irrelevant to the question. It is the decision to take the funds as capital gains, rather than as dividends, that creates any potential risk here. That option is available without ER because of the small amount, but it does not eliminate the risk that if HMRC decide you did a winding up just to take profit as capital, rather than as dividends, they will challenge it. The use or non-use of ER is irrelevant to that problem.

The point of the sentence - he is not claiming ER which is the flag HMRC will look for on any Tax Return submitted claimng the relief. Claiming ER post 6 April = increased risk if returning to contracting or phoenixing.

In OP's case the distribution does not even need to be disclosed on his or his wife's Tax Return so HMRC are unlikely (risk close to zero as can be) to pick this up for review/investigation.

Now the one I sent for a MVL last week for £850K for a property contractor is one HMRC would be interested in!