Making Your Members’ Voluntary Liquidation Go Smoothly

December 2, 2021

2 December 2021: At BRI, we pride ourselves on giving excellent, attentive service to all of our clients and endeavour to progress our members’ voluntary liquidations as efficiently as possible. We fully recognise that our clients expect the liquidation of their companies to result in a prompt distribution of the assets – as well as the VAT refund on BRI’s fees (where applicable) – and the closure of the liquidation to be completed as soon as possible. However, we are always reliant on HM Revenue and Customs giving its consent to the closure of a liquidation case, and this is entirely dependent on the filing of all tax returns covering the period up to the date before our appointment as liquidators.

Understandably, clients will sometimes question why HMRC require returns when their company has ceased trading some months before our appointment and all of the necessary returns were filed at the date of cessation. However, returns covering the period from cessation of trade to date of liquidation are needed to be filed and are ordinarily nil returns. Nil returns serve to confirm that no tax liabilities remain at the date of liquidation, providing HMRC with the assurance it requires to give us the consent to close the case. Unfortunately, when post-cessation returns have not been submitted, the liquidation process can be severely delayed. Naturally, as soon as we are made aware that a return is outstanding, we contact our clients immediately and work with them to address the matter, but HMRC will not always advise us of the issue until we have requested its clearance. Furthermore, HMRC’s current, substantial backlog of work means that we may not be alerted for several months after our appointment.

Suffice to say, for a smooth, efficient members’ voluntary liquidation process, the filing of post-cessation nil returns is strongly recommended. This is why we always emphasise the importance of doing so when we discuss the process with new clients and their accountants.