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Press Release: New service offers advice to UK Contractors winding down Limited Companies

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Johnston Carmichael, one of Scotland’s leading Chartered Accountancy and business advisory firms, is launching a dedicated service designed to help contractors unlock cash in their limited companies, which launches today {6 August 2014}.

Contractor MVLs has been designed around a Members Voluntary Liquidation (MVL), a legal process which closes a freelance contractor’s limited company and allows the shareholders the possibility to receive tax efficient distributions. Currently, if a contractor closes their limited company due to coming out of contract or embarking upon retirement, there can be substantial sums of money remaining in their business bank account.

The most common way to close the company is to take any remaining profit as a dividend. However, depending upon how much profit is left, contractors may be able to close the company via an MVL which offers greater tax efficiencies and thousands of pounds in potential savings.

Heading up the service is Johnston Carmichael partner Donald McNaught. He said: “We are delighted to launch Contractor MVLs, which provides contractors with a platform to close their limited companies quickly and as tax efficiently as possible.

“Many contractors will already have arranged their tax affairs efficiently, by providing services through a limited company. It makes sense that when that company is no longer required, they continue to apply tax efficient strategies to close it down. 

“Contractors closing their limited companies, who have retained capital in excess of £25,000 in their company, should consider using an MVL to extract the remaining capital. The UK Government has imposed a limit of £25,000, above which all distributions from a company would be treated as income and therefore taxed at the shareholders’ marginal rate of tax. 

“When using an MVL, you benefit from your annual capital gains allowance (£11,000 for 2014/15) and also the possibility of utilising Entrepreneur’s Relief (both will depend upon the individual’s wider tax affairs and separate professional advice should be sought). If you meet the criteria then you may only pay tax at the lower rate of 10%. Realistically, after considering the limited costs of an MVL, you will start to see benefits accruing in the form of tax savings if you have around £40,000 and above.”

Contractor MVL launches today at www.contractormvls.co.uk

Johnston Carmichael is a member firm of the PKF International Limited network of legally independent firms and does not accept any responsibility or liability for the actions or inactions on the part of any other individual member or correspondent firm or firms.

For more information on Johnston Carmichael, please visit www.jcca.co.uk 

Issued on behalf of Johnston Carmichael by ThinkPR. For more information, please contact Jenny Adams on 01224 623960 or jenny@thinkpr.co.uk

Disclaimer:   Issuers of the press releases are solely responsible for the content of their press releases. ContractorDaily.com can't be held liable for the content posted by others. 

Source: Issued on behalf of Johnston Carmichael by ThinkPR. For more information, please contact Jenny Adams on 01224 623960 or jenny@thinkpr.co.uk

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Steve has been associated with the UK Contracting industry for over a decade now. He is a sports enthusiast and a die hard Arsenal fan.

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