Closing LTD Company in April 2020, and start new LTD for client determined contracts

[BR14]

Yep, but my plan to close and open seems good right?

Yep. go for it mate, - let us know how you get on.

[BABABlackSheep]

Yep, but my plan to close and open seems good right?

Well you said take full dividend, so you think you will have over £42,000 in your company in April . You then discussed the possibility of making full pension contributions next year rather than salary( as your allowance has been used).

Let’s say you have £50,000 in your business. Personally, I would MVL it, you’ll have what...£43,000 Tax free after fees and ER? With full tax allowance in place for the following year.

Go brolly for a couple of years. Then start another ltd company.

As always dyor, but that would be my preferred option. Others here know a lot more than me. Speak to an Accountant if I was you.

[rootsnall]

You've got to find a brolly that would allow max pension submissions, not many of them about. You can't back pay as you've only been a member of that scheme that year so no previous years to use. You can only put 40k in, rest is taxed and so on and so on.

I think you can use your previous 3 years of 40K as long as you were a member of any scheme in that period.

[Amanensia]

I think you can use your previous 3 years of 40K as long as you were a member of any scheme in that period.

Correct. You don't have to contribute to the scheme that you were a member of in the year for which you are making contributions. You just have to have been a member of any scheme in that year.

[realaledrinker]

Correct. You don't have to contribute to the scheme that you were a member of in the year for which you are making contributions. You just have to have been a member of any scheme in that year.

Maybe obvious point, but you can only offset against pensionable income, i.e. NOT divis.

[Amanensia]

Maybe obvious point, but you can only offset against pensionable income, i.e. NOT divis.

Not so. If the contribution is made by your company, they can pay the full £40k per year even if you had no earnings at all.

[BolshieBastard]

Yep, but my plan to close and open seems good right?

You do realise HMRC have to not object to your limited co's closure for it to be struck off?

[DeludedKitten]

Yep, but my plan to close and open seems good right?

Why would you bother opening a new company? If you're going to be deemed inside IR35 then you might as well go umbrella and be an employee, so why would you bother having the expense of running a business where you can't claim any expenses?

Close the company by all means, using whatever method you want - AIUI, you can strike off if you have under £25k in reserves otherwise you have to use an MVL. Not sure why you would choose to pay out as dividends rather than looking to claim ER though, unless you are intent on creating a new company.

The chances of HMRC being able to reopen the company or transfer any IR35 liability to you individually are probably low, so that would be one way to reduce the risk of having to pay out.

[CandiceMarie]

You can't close down your company then start up another one doing the same type of work within 2 years. Look up 'phoenixing'.

[northernladuk]

You can't close down your company then start up another one doing the same type of work within 2 years. Look up 'phoenixing'.

Only if you've gained some tax advantage from the old one.