May 2014 – ‘Turnover is Vanity, Profit is Sanity, Cash is King..!’ True or False? Well, true in part…
20 October, 2016
Each business is unique and understanding the financial reports requires skill to impart to your clients so
that they understand their results, and for them to act on them. When a client is in need of help you can
readily discuss with us the implications of their current position and we can suggest relevant solutions,
tailoring them to your client. Discussions will be informal and without cost or commitment. Further
contact may follow, leading to more formal approaches, when we move to the favoured solution. We have
significant relevant experience in assisting businesses to move towards healthy profits.
Members’ Voluntary Liquidations (MVLs)
If a solvent company is looking to close or be sold and has reserves of less than £25,000.00, they can be
treated as a Capital distribution and subject to CGT. If over it would be dividend income, remuneration or
a loan. If the company is placed into MVL all distributions are treated as Capital and subject to CGT.
Combined with entrepreneurial relief the tax rate is 10% subject to the lifetime limit of £10 million. The tax
benefit of an MVL to a member greatly outweighs the MVL cost procedure. An MVL can only be conducted
by a Licensed Insolvency Practitioner.
Entry cost is from £2,000 plus VAT plus the bond premium and post liquidation is on time costs. The
simpler the balance sheet, the less time is taken up. Thereafter, there is chargable work for the accountant
i.e. to finalise tax and cessation accounts. There is no need to cancel VAT registrations prior to liquidation
because VAT can be reclaimed on fees and costs of the liquidation and the refund distributed to the
members.
Call Peter, David or Virgil