We’ve spoken a lot on the Clarke Bell blog about changes to IR35 and how it’s heavily affecting contractors and their limited companies. That, along with on-going issues such as the collapse of Carillion, have meant that many contractors are having to close down thier company.
As an accountant, you may be looking to advise your clients on the best way to close a limited company. Depending on their circumstances, the options we recommend are:
Creditors’ Voluntary Liquidation:
If your client’s company is insolvent, ie. cannot pay its debts, a CVL is the best option. It acknowledges their duties as a director to the creditors and allows contractors to close their ltd company of their own terms.
Members’ Voluntary Liquidation:
If your client’s company is solvent and not in any kinf of debt, an MVL is the best option. It’s a tax efficient way to close down a limited company and could save contractors thousands of pounds.