Members Voluntary Liquidation (MVL)
A Members’ Voluntary Liquidation (MVL) is a formal process for closing down a solvent company in a cost effective way.
If you planning to close down your solvent limited company or are a contractor caught inside IR35, then we can help.
Our licensed insolvency practitioners can offer professional advice to contractors caught by IR35 today. Depending upon how much cash there is left, using a Members’ Voluntary Liquidation (MVL) could be the most tax-efficient way and save you thousands of pounds
What is an MVL
A Members’ Voluntary Liquidation (MVL) is a structured procedure designed to wind up a solvent company in a cost-effective manner. MVLs are commonly used as a tax-efficient strategy for exit planning when a profitable company has fulfilled its purpose.
Shareholders may choose this route to extract their investment profits, or if the company’s directors are approaching retirement or seeking to exit the business for other reasons. The MVL process ensures a smooth closure for solvent companies.
By using an MVL, then subject to your future plans, the funds to be distributed are subject to lower rates of taxation (Capital Gains Tax, rather than Income Tax).
If you qualify for Entrepreneur’s Relief (ER), you can benefit from a 10% marginal rate on distributions. This means there can be considerable tax savings for you personally
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We offer a nationwide, remote service
Director led involvement so you will benefit from a high level of expertise every step of the way
When is an MVL appropriate?
- Due to IR35 legislation the owner is no longer able to contract and operate a limited company (PSC).
- The company has sufficient assets to repay all of its creditors, if any.
- The owner wishes to retire.
- The owner wishes to step down from a family business and nobody else wishes to take over.
- The owner no longer wishes to run the business.
- Shareholders wish to realise their interest in an owner managed business.
Process for Members’ Voluntary Liquidation
Members Voluntary Liquidations follow a specific process.
- Tax Advice – Director/Shareholder of the company to take appropriate tax advice from their tax adviser to see if an MVL is suitable. If the company is a Personal Service Company (PSC) then the contractor will ordinarily be both the director and shareholder.
- Formal Instruction – Umbrella are instructed by the company/PSC to assist in arranging the meetings to place the company/PSC into MVL and for Umbrella’s Insolvency Practitioner to be appointed as liquidator.
- Approval – MVL is approved. Umbrella Insolvency proceed to:
- Collect the cash from the company/PSC business bank account.
- Pay off the creditors including HMRC.
- Pay the surplus funds, after costs, to the shareholder/contractor.
Acting as your liquidator, Umbrella will make the Members Voluntary Liquidation (MVL) process as straightforward as possible.
To find out how a Members Voluntary Liquidation could benefit you, speak confidentially to a member of our professional team today. Call: 0800 611 8888.
*We don’t charge for an initial consultation, but it may lead to an insolvency solution where our pre-appointment costs are reimbursed as part of the fee structure that creditors approve.
What our clients say
I engaged Umbrella accountants to oversee a Members Voluntary Liquidation for the small consultancy business I've been running. The team talked me through the MVL process, steps and requirements. The paperwork involved was well explained and straightforward, with the initial disbursement of funds handled very quickly and professionally under tight deadlines.Brendan N,
Umbrella.UK Insolvency guided me as sole Director of my small limited company, and the shareholders, through every step of a Members Voluntary Liquidation in a very efficient manner. The steps required were clearly laid out and proactively managed by their licensed practitioner. From first meeting through to an interim distribution of funds to shareholders took only a few days in our case. Thereafter, Umbrella will be managing all of the downstream actions required to complete the process with HMRC and Companies House, through to the final discharge of the company.Alex O,