Liquidation = liquidator + accountancy fees

[mickael28]

Hello,

I was reading in the forum about costs involved for liquidating a limited company after having being quoted £8,000+VAT by my accountant if I were to use the liquidator linked to them.

I was quite surprised to see that here we were talking about figures around £2,500-£3,000 (possibly with disbursements and VAT included) so I went back and asked my accountant how's that the price they told me was so high and then I was told that that amount was including all accountancy work they have to do for the liquidator as well, meaning that if I used an alternative liquidator, then depending on the additional work required by them, the total cost will be more than just the liquidators cost.

Does the figure of £8,000+VAT sound good to you for all fees (liquidator + accountancy)? I was just thinking that if the liquidator is around £3,000 an accountancy fee of £5,000+VAT seeems to much to me?

Cheers

[Clare@InTouch]

The accountancy would depend on whether you've been paying a monthly fee, or you want them to do the accounts, closure and tax return all together.

The liquidator fee sounds expensive, but some quote on asset value so if you have a healthy bank/asset balance then that could push it up. Still sounds expensive to me though!

[DeludedAussie]

The accountancy would depend on whether you've been paying a monthly fee, or you want them to do the accounts, closure and tax return all together.

The liquidator fee sounds expensive, but some quote on asset value so if you have a healthy bank/asset balance then that could push it up. Still sounds expensive to me though!

What exactly is involved in a liquidation -= For someone to charge you 8K I would expect one person to work for an entire month on this.

I cant believe its more then filling in a few forms and checking bank balances

[Nathan SJD Accountancy]

What exactly is involved in a liquidation -= For someone to charge you 8K I would expect one person to work for an entire month on this.

I cant believe its more then filling in a few forms and checking bank balances

Personally, I do not know exactly what liquidators processes are behind closed doors. But I guess, the fact that they know, and possibly no one else other than a liquidator knows, means they are in control at the moment.

I suspect their fees will reduce over time as the new rules settle in and other liquidators begin to charge significantly less for a slice of the pie.

[Maslins]

There are firms offering full formal liquidations for simple cases for ~£1k+extras, or under £2k all in (disbursements will likely be ~£500 and are unavoidable).

A google search for cheap members voluntary liquidations/similar should find them.

Re accountancy work, to keep liquidator costs down some will insist the balance sheet is simplified right down (ie any liabilities paid off and non-cash assets sold/collected in). Also some form of accounts will need to be done to cessation...though if there's been no trading since the last filed set these should be negligible.

I'd recommend you shop around, as £8k+VAT sounds to me £5-6k more than I'd expect.

[Maslins]

What exactly is involved in a liquidation -= For someone to charge you 8K I would expect one person to work for an entire month on this.

I cant believe its more then filling in a few forms and checking bank balances

There's a summary of the process here.

Basically a lot of form filling required, getting approvals, dealing with the bank transfers (remember you are in effect getting someone else to legally run your business for a short period). Plus all the normal anti money laundering stuff.

Historically/for most non-contractor cases things will be much more complicated, as there'll be assets to sell at the best price, creditors to negotiate with etc etc, all of which takes time and hence costs money...this is why there's a "new breed" of insolvency pracitioners just doing these simple cases for much lower fees.

[BrilloPad]

I have never paid anything like that for winding up a company - a few hundred at most.

But then I did not owe anyone anything.

Who do you owe and how much?

[Maslins]

I have never paid anything like that for winding up a company - a few hundred at most.

But then I did not owe anyone anything.

Who do you owe and how much?

Big difference between getting a company struck off (probably what you did before, paying £10 to Companies House, with the benefit of ESC C16) and a formal liquidation.

ESC C16 was killed off ~4 months ago which means now if you want >£25k taken out of a dead company to be taxed on you as capital gains rather than dividend, you need a formal liquidation.

[mickael28]

I'd recommend you shop around, as £8k+VAT sounds to me £5-6k more than I'd expect.

Thanks for all the replies guys, the £8,000+VAT figure sounded too much for me as well. I'll wait for a little while and see where prices for this are going.

As DeludedAussie mentioned above, for that kind of money it seems they are going to be with your case for a whole month... :S

Thank you!

[Wanderer]

I have never paid anything like that for winding up a company - a few hundred at most.

But then I did not owe anyone anything.

We are talking about a Members Voluntary Liquidation which is the new ESC-C16 which involves a formal liquidation rather than just filing the final accounts, clearing out the bank account and asking companies house to strike the company.


mickael28, reading what other posters wrote in this thread, it didn't take long to find someone who would do the liquidation for a pretty reasonable fee.