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Contractor MVLs

Are you a contractor looking to close down your solvent company?

An MVL could be the most tax-efficient way…

There are many different reasons why you might want to close down you solvent contractor company, including:

  • you’ve just completed a contract
  • you’ve decided to work for a company as a full-time employee
  • you are approaching retirement
  • you might simply want to cease contracting and unlock the cash from your limited company.

Whatever the reason, there are different ways for you to close down your contractor limited company. Depending upon how much cash there is in your company, using a Members’ Voluntary Liquidation (MVL) could be the most tax-efficient way and save you thousands of pounds.

Tax Savings

By using an MVL the funds to be distributed are subject to Capital Gains Tax (CGT), rather than Income Tax. If you qualify for Entrepreneur’s Relief (ER) you can benefit from a 10% CGT rate on distributions. This means considerable tax savings for contractors.

We aim to distribute the assets of your company to shareholders as quickly as possible, usually after 35 days from the date of Liquidation. Our standard fee for an MVL is £995 +VAT, +disbursements (see below for the disbs). There is no need for face-to-face meetings – meaning you can begin the MVL process wherever you are based.

The relevant disbursements

These are all ‘at cost’.

Statutory Adverts

To comply with legislation and best practice, adverts needs to placed to give any possible creditors the chance to come forward to lodge a claim.

For companies registered in England and Wales, three adverts need to go in the London Gazette.

The cost of these are: 3 x £75.05 = £225.15 +VAT = £270.18

For companies registered in Scotland, we may need to take out four adverts in the Edinburgh Gazette and one in the Scottish Daily Mail.

The cost of these is (4 x £75.05 = £300.20 +VAT and 1 x £69+VAT): £443.04

For companies registered in Northern Ireland, four adverts are needed in the Belfast Gazette.

The cost of these is (4 x £75.05 = £300.20 +VAT): £360.24

Statutory Bond

A compulsory bond needs to be taken out. This provides you with security whilst your funds are under the control of Clarke Bell. The bond fee is dependent on the the assets of the company.

Below are the current rates: effective 1 May 2015.

Asset Value (£)
Premium (£)
10,001 – 25,000
20
25,001 – 50,000
48
50,001 – 100,000
80
100,001 – 250,000
120
250,001 – 500,000
185
500,001 – 1,000,000
240
1,000,001 – 2,000,000
500
2,000,001 – 3,500,000
560
3,500,001 – 5,000,000
675
Over 5,000,000
800

I am very impressed with the professional and efficient approach adopted by Clarke Bell and Katie Dixon in particular.

Our MVL was handled in a timely manner and I was kept informed of progress throughout.

This is an excellent service which is also very good value for money – I am pleased to recommend Clarke Bell without reservation.

Clarke Bell provided a fast, friendly, professional, efficient and low cost service when we decided it was time to end the life of our company via the MVL route.

The documentation supplied was clear, any questions were answered immediately and there were no hidden costs.

I have absolutely no hesitation in recommending Clarke Bell to any other company director wishing to end the life of their company via the MVL route.

Dear Mr. Bell, your firm has just completed the liquidation of the above company which was handled by Katie Dixon.

I would like to record the excellent service given by her, and other members of staff, and the professional and timely manner in which she conducted the liquidation.

I will certainly use the services of your firm for any future liquidations of my clients and would recommend your firm to others needing such services.

For your free expert advice 0161 907 404

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