Contractor companies are typically short lived, often becoming superfluous due to the main worker taking on a PAYE role, emigrating, or teaming up with others. This can happen to contractors working in IT, finance, oil and gas, or any other sectors/industries.
Minimal overheads mean how much money remains in the company mainly depends on how much the owners choose to take out.
Many contractors invoicing £50k-200k+ per year outside IR35 restrict drawings to a nominal salary and dividends up to the higher rate band, minimising personal tax. Doing this over a few years can lead to a significant pot of cash.
Previously, the contractor could use ESC C16 to take this out upon strike off with the benefit of capital gains tax treatment, but that’s no longer the case. Our cheap members voluntary liquidations are perfect for contractors to affordably liquidate their company.