Entrepreneur's relief

[Biggles78]

Hi,
I closed down my limited company in April this year. I've been in a permie role for 18 months, during that time, the company has had a minor income as I've been winding things down. There's a balance of almost £40K left in the company, rather than take it in dividends, which are taxed at a higher rate (my PAYE role puts me into that bracket), I want to try and claim for entrepreneur's relief as I've dissolved the company and I'm not planning on contracting within the next 2 years. My accountant says that I should be eligible for entrepreneur's relief, but HMRC will challenge it, so I need a good explanation - reading the rules, I'm not sure "my wife doesn't want me working longer hours as a contractor, commuting and lack of job security" would be sufficient to convince the HMRC. Assuming they suspect I'll go contracting within 2 years and that doesn't happen, then do I get a rebate?

TAAR for that - Contractor Weekly

Advice appreciated, thanks...

[MrButton]

Give MVL online a call to discuss your situation. They have a good rep on here.

I don’t understand where the funds sit if you’ve already closed the company?

At £40k I don’t think it’s enough to really benefit from ER but could be wrong. Someone like Maslins I’m sure could run the numbers.

[northernladuk]

Erm.. You say you've dissolved the company. That would mean the money is no longer yours (the company I mean) and now belongs to Her Majesty the Queen surely?

[Biggles78]

I transferred the money out before closing on the advice of my accountant. The company account had a balance of 0 when closed.

[Manic]

I think you need to explain more.....how was the remaining funds dealt with prior to closure? You can't simply take the money out, dissolve a company and then retrospectively claim ER.

[MrButton]

You really need to have a proper chat with your accountant.

Otherwise this thread will take weeks to get the full story.

[northernladuk]

I transferred the money out before closing on the advice of my accountant. The company account had a balance of 0 when closed.

Then there is nothing to claim ER on or from. The company is gone and the money is gone. All you've got is a proper mess you need to sort out pronto.

Isn't it this type of mess that triggers investigations?

[cojak]

You should have contacted MVLOnline before you did anything else.

I’m not sure if you’ve messed up or not but I’m glad not to be in your situation.

Chris has taken me though this - it’s easy but it needs to be done in the right order.

And they will tell you if they expect HMRC will object, usually not - HMRC just want things closed down properly and given the tax that they expect (which includes the ER).

[craigy1874]

You have taken dividends from final profits, the MVL and ER ship has sailed I am afraid.

Your accountant really should have been aware of the procedure involved to close a company via MVL.

Expensive mistake!

[Biggles78]

Bugger, so much for trusting the accountant!