PHILIP A BECK
Chartered Accountant
Licensed Insolvency Practitioner

41 Kingston Street, Cambridge CB1 2NU
Tel: 0800 1953605 (Free call) or 01223 367022
Fax: 0844 5048737
email: pbeck@ntlworld.com

IVA

How much does a members' voluntary liquidation cost ?  Is it worth it ?

Special offer 2,000 fee + disbursements for "cash shell" companies

Following the enactment of ESC C16 , from 1 March 2012 any company being would up informally will have a limit of 25,000 total distribution for it to be treated as capital rather than dividend income in the hands of the shareholders.  For higher rate taxpayers the tax benefit of an MVL will likely exceed the cost of the MVL for any company with distributable cash of more than 25,000.

I'm very open with my MVL quotations, and will quote fully inclusive of the fee and all disbursements.  Disbursements are 4 Gazette notices at 63.50 + VAT each, search fee of 3, and a bond, the premium of which varies according to the asset value of the company, but will probably be a couple of hundred pounds.

To qualify for this highly competitive rate, the company's director(s) and accountants must have done all the preliminary work to leave the company as a cash shell suitable for distribution to the shareholders.  This means taking the following steps:

1. Cease trading, realise all assets and pay all liabilities, leaving just cash at a single bank.
2. Deregister from PAYE and VAT having submitted final returns and paid final liabilities.  Any VAT incurred post-deregistration can be reclaimed.
3. Prepare and submit final accounts to date of liquidation and corporation tax returns and pay any tax liability thereon.

Any additional services such as distributions in specie (distributing non-cash assets to shareholders), realising assets other than bank accounts, settlement of liabilities or making multiple distributions to benefit from 2 years' CGT allowances would be charged at an additional hourly rate.

Substantial discounts are available for multiple liquidations of dormant companies within a group with common directors and one holding company as shareholder.  In this case the cost could be as low as 1,500 + disbursements per company.

Philip Beck is a Chartered Accountant and Licensed Insolvency Practitioner operating since 1996 with substantial experience in undertaking liquidation, both solvent and insolvent.

Back to Members Voluntary Liquidation Home Page

Members Voluntary Liquidation Questions and answers.

What are the tax advantages of a Members Voluntary liquidation ?

What is the procedure for putting a company into Members Voluntary liquidation ?

Can this be done informally without the expense of liquidation ?

What is Extra-Statutory Concession C16 (ESC C16) ?

What are Undistributable Reserves ?  What can be done about them ?

What is Bona Vacantia ?

How much does it cost to put the company into members voluntary liquidation ?

What is a Section 110 Reconstruction and how can it achieve a tax-efficient disposal of part of a company's business ?

What happens if creditors' claims arise during the liquidation ?

What happens at the end of the liquidation ? Can the company ever be restored to the register if necessary ?

Please note that this site deals only with company and tax law in the United Kingdom of Great Britain and Northern Ireland.   It is not applicable to other jurisdictions.

Copyright © Philip Beck Insolvency Practitioner, Cambridge UK, 2010. Solvent Liquidations (MVL)s explained.

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