IR35 AccountantsCompany Closure & MVL
Closing or pausing your PSC when you go inside, go permanent or retire: dormancy, strike-off versus Members’ Voluntary Liquidation, Business Asset Disposal Relief and the TAAR.
BADR 18% from 6 April 2026 · £1m lifetime limit · £25,000 strike-off concession · TAAR two-year same-trade rule
Company Closure & MVL: what you need to know
Contractors close companies for ordinary reasons: a permanent role, retirement, a long inside-IR35 stint, or simply enough. The tax outcome, though, varies enormously with the route chosen. Below £25,000 of reserves, a simple strike-off keeps capital treatment under the statutory concession. Above it, strike-off distributions are taxed as dividends at up to 39.35%, while a Members' Voluntary Liquidation preserves capital gains treatment on the whole amount. That single threshold decides the method for most PSCs.
Capital treatment is where Business Asset Disposal Relief does its work, taxing qualifying gains at 18% for disposals from 6 April 2026, up from 14% in 2025/26, within a £1m lifetime limit. The trap sitting behind every winding-up is the Targeted Anti-Avoidance Rule: return to the same or a similar trade within two years, with tax advantage as a main purpose, and the capital distribution is recharacterised as income. Accepting a new contract through a fresh PSC eighteen months after an MVL is the classic way to hand the saving straight back.
Closure is also not always the answer. Dormancy keeps the company, its name, its banking history and its VAT registration alive for a modest annual compliance cost, which suits anyone whose inside contract or permanent role might prove temporary. We run the strike-off, MVL and dormancy numbers on your actual balance sheet, sequence the pre-closure housekeeping, and bring in a licensed insolvency practitioner where an MVL is the right call.
What you get
The route chosen on your numbers
Strike-off, MVL and dormancy compared on your actual reserves, including the liquidator's fee, so the decision rests on arithmetic rather than habit.
TAAR risk addressed before you commit
Your realistic plans for the next two years are tested against the same-trade rule before the winding-up starts, when there is still time to choose differently.
BADR qualification confirmed
The two-year trading and shareholding conditions are checked in advance, and remaining lifetime limit accounted for, so the 18% rate is secured rather than assumed.
Housekeeping that shortens the timeline
Final accounts, deregistrations and the closing corporation tax settled before the liquidator is appointed, which is what gets cash distributed in weeks rather than months.
What's covered under company closure & mvl
We handle the full range of work that sits within company closure & mvl, including:
Members' Voluntary Liquidation referral
Pre-liquidation accounts and tax clearance prepared by us, then a handoff to a licensed insolvency practitioner who conducts the solvent winding-up.
Company strike-off service
The full DS01 route for companies with reserves under £25,000, sequenced so final accounts, tax and deregistrations complete before the application goes in.
Business Asset Disposal Relief planning
Confirming the officer, trading and shareholding conditions are met and the lifetime limit position known, so the 18% rate applies to the distribution.
TAAR and phoenixing risk review
A pre-closure assessment of whether your likely activity inside two years would trigger the anti-avoidance rule and convert capital back into income.
Dormant company maintenance
Dormant accounts, the confirmation statement and appropriate deregistrations each year, keeping the company ready to restart if outside contracting returns.
Final accounts and tax clearance
Closing corporation tax computations, final VAT and PAYE deregistrations and HMRC clearance, the housekeeping that determines how fast any closure completes.
Who this is for
We advise contractors in situations like these:
- A contractor taking a permanent job with six figures of retained profit, weighing an MVL at the 18% BADR rate against drawing it down as dividends over several years.
- A retiring consultant with reserves just over the £25,000 line, where the strike-off concession no longer applies and the MVL maths needs running properly.
- A director who closed via MVL and has been offered a contract in the same field fourteen months later, needing TAAR advice before signing anything.
- A contractor starting an eighteen-month inside-IR35 engagement, deciding between mothballing the company as dormant and closing it for good.
- A PSC owner who started a DS01 strike-off without final accounts or HMRC clearance and needs the position untangled before objections land.
How an engagement works
Set out the company and the plan
Rough reserves, why you are stopping, and what the next two years might hold. The TAAR makes that last part essential.
Fixed written quote in 48 hours
We price the complete closure as a fixed quote, including the liquidator where one is needed, before any step is taken.
Housekeeping sequenced first
Final accounts, deregistrations and the closing corporation tax are settled first, which is what gets cash distributed in weeks rather than months.
We manage the wind-down
We prepare the final accounts, settle the tax, handle deregistrations and run the chosen route through to dissolution.
Read before you decide
The guides library covers the rules behind this service in depth.