In a solvent liquidation, a liquidator would typically notify HMRC immediately upon appointment to ascertain whether there are any outstanding returns and whether HMRC have a claim. A notice of intended dividend (“NOID”) would usually be issued giving HMRC and all other creditors a 4-8 week opportunity to submit claims against the company. Once the NOID has expired, the liquidator could make a distribution to shareholders.

HMRC has recently issued guidance for IPs dealing with solvent liquidations as they are unable to cope with volume of correspondence in a timely manner. HMRC’s guidance states that they will now write to IPs after 3 months to notify them of any outstanding pre-appointment returns.

If the IP has not been notified by HMRC by month 4 after the appointment, the IP should contact HMRC to ascertain whether any pre-liquidation returns are outstanding.

If you are considering a MVL, our advice is to ensure that all returns (VAT, PAYE / NI and CT etc) returns are submitted prior to the liquidation. HMRC’s stance may result in increased costs and delays.