Typical warchest amount and MVL Typical warchest amount and MVL
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  1. #1

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    Default Typical warchest amount and MVL

    Hello,

    Just wondering what the typical warchest amount is for people who've been contracting for a while (say more than 10 years) , especially in relation to a potential MVL?

    I've built up a large warchest over the years and contemplating closing my limited company via an MVL due to the way the market is these days.

    Although I'm not sure if having a large amount of retained profits might cause an issue when trying to do an MVL?

    Couldn't find any stats on this.

    Would be good to gets other people's thought on this who might be in a similar situation.

    Thanks

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    As big as you can. I don't see why putting a limit on it (using some common sense of course) helps. This time more than ever proves it can't be too big surely?

    IMO, through recent experience, you need a years worth of full normal pay behind you that you can extend by tightening the belt if need be. I had nearly thst and ate through 6 months of it. No money pressures during this time but with half of it gone I am extremely twitchy at the moment. If I had any less I'd be crapping myself right now.

    I most certainly wouldn't be capping my war chest for a tax saving thats for sure, imminent or not. Keep yourself safe first and it you lose a bit of tax on it then so be it. Its a massive chunk of money on top of a good living at the end of the day so don't let greed overrule safety.
    Last edited by northernladuk; 30th March 2020 at 08:57.
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    Quote Originally Posted by Scoooby View Post
    Hello,

    Just wondering what the typical warchest amount is for people who've been contracting for a while (say more than 10 years) , especially in relation to a potential MVL?

    I've built up a large warchest over the years and contemplating closing my limited company via an MVL due to the way the market is these days.

    Although I'm not sure if having a large amount of retained profits might cause an issue when trying to do an MVL?

    Couldn't find any stats on this.

    Would be good to gets other people's thought on this who might be in a similar situation.

    Thanks
    MVL ASAP - then in about 6-8 weeks time invest lot into the stock market for 20% short term gain


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    Thanks for the replies.

    Just wondering if there is such a thing as an acceptable amount of retained profit to extract via an MVL, with anything above this likely to attract the interest of HMRC?

    It would be good to know if anyone has experienced any issues with this in the past or is thinking about this being an issue for them?

    If so, what other options are there if you still plan to close the company down in the foreseeable future?

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    Quote Originally Posted by Scoooby View Post
    Thanks for the replies.

    Just wondering if there is such a thing as an acceptable amount of retained profit to extract via an MVL, with anything above this likely to attract the interest of HMRC?

    It would be good to know if anyone has experienced any issues with this in the past or is thinking about this being an issue for them?

    If so, what other options are there if you still plan to close the company down in the foreseeable future?
    I can't think for one minute the amount of money extracted by MVL will even bat HMRC's eyelid. The process will be used by people who just meet the criteria and companies that have millions in the bank. As long as it's done properly I am sure they don't care about the amounts.

    Just think about why you are closing. The problem is you won't be able to open another one for two years. We've already had one guy that's shut it and it didn't work out with his brolly and he wants to open a LTD to go back outside... which he can't. I have a feeling we are going to have a raft of these in the short term with the U Turn and in general for the next 2 years.
    Last edited by northernladuk; 30th March 2020 at 15:27.
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    Quote Originally Posted by Scoooby View Post
    Hello,

    Just wondering what the typical warchest amount is for people who've been contracting for a while (say more than 10 years) , especially in relation to a potential MVL?

    Thanks
    I wouldn't me comfortable with anything less than 12 months of normal costs of living for a family, which should be what, 50-60K for a family of 4 inside M25? Obviously, 3 years is better than one - should be achievable in 10 years.

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    In case it's of interest, I just checked out the net asset values of MVL Online appointments over the last few years:

    14% = £25k-50k
    32% = £50k-100k
    42% = £100k-250k
    10% = £250k-500k
    2% = £500k-1m

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    Thanks for all your replies on this. It definitely helps to put the option into context.

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    Quote Originally Posted by Scoooby View Post
    Thanks for all your replies on this. It definitely helps to put the option into context.
    Cheers dude


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  10. #10

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    Quote Originally Posted by northernladuk View Post
    I can't think for one minute the amount of money extracted by MVL will even bat HMRC's eyelid. The process will be used by people who just meet the criteria and companies that have millions in the bank. As long as it's done properly I am sure they don't care about the amounts.

    Just think about why you are closing. The problem is you won't be able to open another one for two years. We've already had one guy that's shut it and it didn't work out with his brolly and he wants to open a LTD to go back outside... which he can't. I have a feeling we are going to have a raft of these in the short term with the U Turn and in general for the next 2 years.
    Agree with this. I was going to use an MVL but had second thoughts as I can see there being a need for real outside ir35 contracts when the dust settles as we will be in the middle of a sh1tstorm. I do want to close the Company as don't want HMRC investigation. Current gig was 2 years outside and now inside so don't want to take chances ... even with protection. Luckily I have a few years of pension contributions I can utiiise. I plan to take a small dividend in new financial year in order for Company balance to be under £25K and then close it down without need for MVL.

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