Client – Limited Company
Location – Bradley Stoke
Our Client, a Limited Company based in Bradley Stoke, Bristol, were closing their business for personal reasons. There was still money sitting in the bank account, as they were trading profitably.
Our Client believed they should declare a large additional dividend to allow access to the balance of bank account after the final HM Revenue and Customs charge had been settled, and had included this initial calculation in their draft accounts.
On receipt of the Clients’ accounts, we identified that dividends were not tax efficient for either the Company or the directors’ personal tax situations.
Using HMRC specific redundancy payment rules, the employment contracts of the two directors were terminated, and redundancy payments replaced part of the final dividend, which reduced the taxable profit by 50% and in turn the final corporation tax bill was reduced by the same percentage.
Additionally, these redundancy payments would be tax free to the two directors, saving them a higher rate tax liability.
Our client saved over £5,000 by accepting our professional advice.
As part of our Company ethos of ‘Hand Held Accounting’, we also provided a comprehensive timetable for the necessary practical steps to finalise their obligations to HM Revenue and Customs and Companies House and close their business.
The company was dissolved successfully 3 months after the final accounts were filed at Companies House.
Talk To The Experts
Closing a business comes with many complexities, so it pays to have an expert on your side. In this case, our client saved thousands by hiring us to help them through the closure of their business.
We provide comprehensive accounting and tax solutions to small and medium sized businesses, whether you have a Limited Company or you are a Sole Trader, we can help save your business money and help you work more efficiently; give us a call today on 0117 3790810 to find out more.