In last year’s budget, George Osborne announced plans to increase dividend taxation, coming into effect from 6th April 2016.
Dividends tax rates will be changed to 7.5% for basic rate taxpayers (above the £5,000 allowance), 32.5% for higher rate taxpayers and 38.1% for additional rate taxpayers.
With bills expecting to triple, many companies and accountants are looking for alternative ways to keep tax rates low and avoid the sting of a tax hike.
Solvent liquidations, known as members voluntary liquidations (MVL), may appeal to cash rich company owners who were considering closing down as this is a tax efficient method. Tax due could be substantially lower if you are eligible for entrepreneurs’ relief with the MVL.
If you need advice on closing down your company, please do not hesitate to call us on 0800 9700539.