The world of MVLs and HMRC’s developing strategy continues:
I think most commentators now accept that case of HRMC taking litigation to minimise in specie distributions was a mirage. Indeed, I heard this week that HMRC is becoming increasingly disinterested in this element of its “Reducing hidden income avoidance by Directors” strategy.
It gets better though, as we understand HMRC’s MVL team are becoming increasingly irritated by the length of time MVLs are remaining open, principally to allow the S455 changes to be unravelled. From my previous articles’ readers will note that HMRC can end up with a claim for statutory interest on the s455 element of the claim for the period it is outstanding, which can be for about 21 months, i.e. nine months after the end of the first period of the Liquidation. All a bit of a mess!!
The response? HMRC are now encouraging us to shorten the first accounting period of the liquidation from the customary 12 months to a number of days, effectively cutting a year off the time the file will be open at HMRC reducing the period over which statutory interest might be charged and allowing us to complete the liquidation within a year.
A very simple and effective way to resolve this HMRC generated problem.
Well done HMRC.
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