Calculate Members' Voluntary Liquidation (MVL) costs, liquidator fees, and tax savings for solvent company closures in the UK.
A Members' Voluntary Liquidation (MVL) is the formal process for winding up a solvent company. It allows shareholders to extract company funds at Capital Gains Tax rates (10% or 20%) rather than income tax rates on dividends (up to 39.35%), making it very tax-efficient for profitable companies with retained profits.
If you qualify for Business Asset Disposal Relief (formerly Entrepreneurs' Relief), you pay just 10% CGT on distributions up to a £1 million lifetime limit. Without BADR, basic rate taxpayers pay 18% and higher rate taxpayers pay 24% CGT (2024/25 rates). BADR can save tens of thousands on larger distributions.
A licensed insolvency practitioner typically charges £1,500–£5,000 for a straightforward MVL, depending on complexity. For companies with assets under £25,000, an informal dissolution (striking off) via Companies House for just £33 may be more cost-effective, though it has different tax treatment.
A standard MVL typically takes 3–12 months. The liquidator must advertise for creditors (2 months), realise assets, pay creditors, and make distributions to shareholders. If no complications arise, distributions can often be made within 3–6 months.
No — MVL is only for limited companies. Sole traders and partnerships cannot use MVL. However, they can cease trading by simply stopping business, notifying HMRC, and submitting final tax returns.