Members Voluntary Liquidation (MVL)
Are you planning to close down your solvent limited company or have been caught inside IR35? IR35 Liquidation for Contractors – We can help.
Our licensed insolvency practitioners can offer professional advice to IR35 contractors 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
An MVL is an effective exit strategy if you have been caught by the Private Sector IR35 reform which came into force in April 2021. It can help contractors extract funds in a tax efficient manner.
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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Director led involvement so you will benefit from a high level of expertise every step of the way
I extend my appreciation of your professional efficiency in handling my company business and herewith say thank you.
I'd just like to thank both you and Tom for your help with the closure of my company. You have been highly efficient and very professional throughout. Thank you.
First of all, I would like to say a BIG Thank You for all of your assistance over the past year. I would not be in the positive state of recovery without Umbrella Insolvency. Your care and assistance at the application stage last summer, along with the advice throughout the year, has been great. I would not hesitate to tell anyone in my negative situation where to turn to.
Thank you so much for your help with my IVA. As an ex-company Director my life took a downward spiral when creditors from my liquidated company called upon my personal guarantees. I had been treading water for months, ran up credit card debts and borrowed from family. When a creditor instigated bankruptcy proceedings against me I thought I was going to lose my house. I contacted Umbrella.UK Insolvency who stopped all the phone calls and threatening letters. Umbrella Insolvency explained things in a way I could understand. They negotiated with creditors and my IVA went through, now I can sleep at night again and I kept my home. Thomas Fox was extremely knowledgeable and I truly thank him and his team.
Umbrella 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.
Before I came to Umbrella.UK Insolvency I was in a bad place mentally due to debt because I believed I would be in my current situation for a long time to come. Umbrella Insolvency walked me through my options and helped me pick the best one. I am genuinely amazed at what they managed to do for me and can now afford to live comfortably, and without the constant worry of debt looming over me.
*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 is an MVL?
An MVL is a formal process whereby the company’s shareholders willingly decide to wind up a business in order to distribute assets between the members.
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.