In April this year, the IR35 tax reforms meant huge changes for the contractor market.

The changes mean that many directors out there who run personal services companies no longer need their ltd company.

If you’re a contractor who has had to take full-time employment or work through an umbrella company you may want to know what your options are when it comes to company closure.

The first question to ask

Is the company solvent? Can it pay off its debts and still have money left in the bank.

If the company is solvent a member’s voluntary liquidation could be the most tax-efficient way of closing down the company and getting your money out of the company.

If the company has debts such as a bounce-back loan and corporation tax and is unable to pay them then a voluntary liquidation would be the best option to close the company. In this situation, these debts would be written off and the company formally closed.

Tomorrow I’m going to be talking about what problems a contractor might face when closing down their personal services company.

Any questions please let me know,

All the best,
Chris

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