If your company is financially healthy but you are ready to retire, a Members’ Voluntary Liquidation could provide an orderly and potentially tax-efficient way to close it.
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Thinking About Retiring This Summer? It May Be Time to Explore an MVLPosted: Jul 20, 2026

It is about this time of year we see an increase in clients looking at Members Voluntary Liquidation (MVL) as a potential route to retirement.

Well, it’s understandable that people explore MVLs about now. Summer has a habit of changing the way we think about our working lives, doesn’t it? With longer evenings, holidays approaching, relaxing with the family and a little more time away from the day-to-day pressures of work, many business owners begin to ask themselves an important question:

Do I really want to do this for another year?

If your company is financially healthy but you are ready to retire, a Members’ Voluntary Liquidation could provide an orderly and potentially tax-efficient way to close it.

So, if you are a company director and find yourself in the position where you are seriously considering making the move to retirement, an early conversation can help you understand your choices before tax rules, personal circumstances or political priorities change.

 

What is a Members’ Voluntary Liquidation?

An MVL is a formal process for closing a solvent limited company.

That means if your company is solvent and can pay all its debts, including interest, within 12 months, an MVL may be appropriate when:

In fact, if you look on the government website, it specifically identifies retirement and stepping away from a family business as reasons directors may choose an MVL. The process requires a declaration of solvency and the appointment of a licensed insolvency practitioner to act as liquidator. Think of it as a controlled way of bringing a successful solvent business to an end and distributing its remaining value to shareholders.

 

Why summer can bring retirement plans into focus

Running a business can become a way of life. With everything that comes as part of being a director, there is rarely a perfect moment to stop and think about the future.

A summer break can create that moment.

It is often the time when people realise that they want more time with their family, more freedom to travel or simply fewer responsibilities. These thoughts do not automatically mean you should close the business, but they may well be telling you it’s time to look at your options. If the company is solvent, has accumulated assets and no suitable buyer or successor exists, an MVL deserves serious consideration.

 

What does Capital Gains Tax have to do with an MVL?

One of the potential advantages of an MVL is the way distributions to shareholders can be treated for tax purposes. Distributions made through an MVL are normally treated as capital distributions and may therefore be subject to Capital Gains Tax rather than Income Tax.

The actual tax payable depends on your individual circumstances. These can include:

This is why it is important to get the right advice. As a licensed insolvency practitioner, we are in a position to help with that.

 

Could Business Asset Disposal Relief reduce the tax?

Some directors and shareholders may qualify for Business Asset Disposal Relief, commonly known as BADR, but eligibility is not automatic.

The standard Capital Gains Tax rates for gains made from 6 April 2026 are generally 18% within the basic-rate band and 24% above it.

Just as a reminder, though, these figures are useful when considering your options. They should not be used as a substitute for advice based on your company, shareholding and personal tax position. Every situation is different, so we need to talk things through with you to assess where you are.

 

 

Could Capital Gains Tax increase again?

It is impossible to say with certainty what future governments or chancellors will do, of course, but right now, I am hearing from a lot of people who are concerned about it.

Capital Gains Tax rates and reliefs have already changed in recent years. Business Asset Disposal Relief moved from 10% to 14% in April 2025 and then to 18% in April 2026. That doesn’t mean they will change again but it’s a useful reminder that tax rules are not fixed indefinitely.

Future budgets could change:


Amongst other possibilities.

Honestly, it would be unwise to make a major retirement decision based entirely on speculation about who might be in office or what they might announce; however, you should probably recognise the potential and factor it into your decision.

The sensible response to uncertainty is not to panic or rush. It is to understand the position and then determine whether delaying your plans could expose you to detrimental future changes.

 

Should you close now simply because tax might change?

Tax is important, but it probably shouldn’t be the only factor behind your decision. This is a big step and literally a life changing one if you plan to retire. There is lot more to an MVL than just the numbers and the process because it’s also about your future.

So, you may also need to consider:

An MVL is a formal process. There will be all the legal requirements to meet as well as the tax and other considerations, so a fair amount of preparation is usually required.

Starting the conversation now gives you time to plan properly.

 

What happens during an MVL?

Although every company is different, the process will generally include:

MVL’s can give directors a clear route from running the business to beginning the next stage of their lives, but only if they are properly.

 

You do not need to decide before asking for advice

Retirement is a significant personal and financial decision. It is perfectly reasonable to be uncertain about the timing or whether an MVL is the right route.

That is exactly why an initial consultation can be valuable. It’s not unreasonable to want to be sure you know where you stand and if this is the right decision. As insolvency practitioners, part of our remit is to help you make the right choices.

Call us or book your free consultation, and we can look at areas such as:

The purpose of the conversation is to give you a clearer understanding of your position and help you make an informed decision. If that decision is to go ahead, then you can appoint us to start the process.

 

Is this the summer you start planning your retirement?

You may not be ready to close the doors tomorrow. You may not even be completely certain that you want to retire. However, if the thought has started to feel less like a distant possibility and more like a genuine plan, this could be the right time to explore your options.

Tax rules can change. Governments can change. Your personal priorities can change too, and summer is often the time that they do. A confidential conversation now can help you understand what an MVL could mean for you, your company and the value you have built over the years. It may set you on the path to retirement, it may lead elsewhere, but wherever it leads, you will know where you stand.

 

This article provides general information and does not constitute tax or legal advice. Eligibility for tax relief depends on individual circumstances. Directors should obtain advice from a suitably qualified professional and licensed insolvency practitioner before acting.

 

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Less than Festive – Sharp increases in hospitality insolvencies pre-Christmas

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A tax to be paid – Changes to the way HMRC view writing off a director’s loan account during insolvency.

It isn’t unusual that a director of a company will have an outstanding director’s loan account. If that ... more

More than knowledge – What to look for in an Insolvency Practitioner

What makes a good Insolvency Practitioner? There are some fundamental skills and experience that should really ... more

Wasps, the well known Coventry based rugby club, have filed the intention to appoint administrators with the high court. So, is that the end of the line for the team and its supporters?

Intent to file administration by rugby club Wasps - What does it all mean?

What does ‘intent to appoint administrators’ mean? If you have been keeping up with the news ... more

Is your business going through a bad patch or insolvent? – Red light and green lights

Green, amber, and red lights of insolvency If we were to make a list of things that directors usually tell us ... more

The voices of doom – Don’t panic, things may not be as bad for business as they sound.

How bad are things for business? You can’t help but notice that the economic news is pretty grim at the ... more

Personal guarantees – Where do you stand and what do they mean to your finances?

Personal guarantees can be a problem when a business becomes insolvent, and directors are often concerned about ... more

If the economy is so bad, why aren’t we seeing a flood of insolvencies?

What happened to the insolvency crisis? Back in what now feels like aeons ago during 2021, there were rumblings ... more

Resilience and down to earth assessment – Dealing with the rise in business costs

The cost of business crisis. Without knowing your expenditure, it is almost impossible to make a sound judgement ... more

Full disclosure matters when it comes to debts, bankruptcy, and insolvency.

The importance of honesty. There is nothing the press likes more than a celebrity scandal and former Wimbledon ... more

BBL anxiety - Should you be worried about Bounce Back Loan consequences?

You have probably seen various stories in the press about Directors of businesses being caught out because they ... more

Time for a change? If you are considering solvent liquidation, now may be the time.

Why do people consider a Members Voluntary Liquidation? Unlike insolvency, which is driven purely by financial ... more

All things come to an end – The end of temporary insolvency measures.

When the insolvency legislation was temporarily changed during the pandemic, I suspect there was a widespread sigh ... more

Once more around? – Things to think about coming out of the pandemic.

I heard a wonderful phrase to describe the current situation the other day. Someone said they would be glad when ... more

Riding the roller coaster - why cashflow should now be at the top of your priority list

If you run a business and don’t currently have cashflow planning at the top of your agenda, you probably ... more

Yes, for those of you that watched ‘Game of Thrones’ you will appreciate that this is the threat of bad things happening. We have heard similar phrases being used in the press, such as ‘Winter of discontent, ‘Shortages’ and stories of empty shelves.

Winter is Coming!

Yes, for those of you that watched ‘Game of Thrones’ you will appreciate that this is the threat of bad ... more

Having spent 30 years working with Companies in trouble we have seen this in the past, for example after the 2008 banking crisis, HMRC took the same approach only to return to their normal ways a couple of years later and in my experience, they can be even more aggressive as the demand for collections from the treasury increases. To make matters worse given the change in legislation in December 2020, now that HMRC are preferential creditors in an insolvency, they are likely to push even harder knowing they will be top of the queue for payment if the business fails.

Beware HMRC collections will be returning to normal SOON.

As you will appreciate, during the pandemic HMRC has been very busy dealing with the various support schemes, ... more

An End to the Temporary Insolvency Measures – Almost but not Completely

Companies in financial distress as a result of the pandemic have been protected from creditor action since last ... more

When a Company fails it is quite common that directors are excused of Wrongful or Insolvent trading. Wrongful trading, sometimes called insolvent trading, is quite a complex area to discuss and is based on the facts of each individual case so advice should be sought if you think this applies to your company.

Wrongful trading, Insolvent trading – What is it and what does it mean?

When a Company fails it is quite common that directors are excused of Wrongful or Insolvent trading. Wrongful ... more

Government Extends Help Again but are we just kicking the problem down the road?

This is the fourth time I have written about the Government extensions of the insolvency provisions brought in ... more

I the first of these BBL articles we looked at your options if you are struggling to pay your Bounce Back Loan payments. If you haven’t read that article, it may be worth reading it now because we discuss the routes available to you via the ‘Pay as you Grow’ options. In this article, we want to focus on what happens if your financial situation has progressed to a critical stage.  There is a lot of uncertainty and conflicting opinions so, we will try to answer the main points raised by the question ‘what happens if I can’t pay back my Bounce Back Loan’?

What to do about your Bounce Back Loans (BBLs) Part 2 – What if you cannot pay it.

I the first of these BBL articles we looked at your options if you are struggling to pay your Bounce Back Loan ... more

Bounce Back Loans are becoming a big problem area and we may only be scratching the surface of the impact they may well have on business. Thinking back to when they were first announced, they may not have been the covid response many limited companies wanted, but they did potentially offer a stop-gap solution.

What to do about your Bounce Back Loans (BBLs) – Part 1

Bounce Back Loans are becoming a big problem area and we may only be scratching the surface of the impact they may ... more

The Government has announced a new scheme to help individuals with debt problems. The scheme is described as ‘Breathing Space’ and comes into effect on 4 May 2021.

New Scheme Announced for Individuals with Debt Problems.

The Government has announced a new scheme to help individuals with debt problems. The scheme is described as ... more

I also think it is fair to say that Pre-Pack sales by an Administrator have had a high level of press coverage. All the evidence suggests that a Pre-Pack sale commonly leads to a better return to creditors than a forced sale shut down. But equally, creditors are understandably concerned because the sale is conducted very quickly following the appointment of the Administrator and often, they are the last people to hear about it. This concern is always worse when the sale is to a connected party.

Pre-Pack Sales to Connected Parties – The New Evaluator Process

First of all, it is fair to say this blog is very technical and probably more for our professional contacts, so if ... more

The Insolvency Service produces monthly figures for both corporate and personal insolvencies and as mentioned previously, I rarely comment on them. Partly because insolvencies are seasonal, so generally increase in the first and third quarter of the year and decrease in the second and fourth quarter and partly because there is not much to talk about.

Latest Insolvency numbers are released for March 2021.

The Insolvency Service produces monthly figures for both corporate and personal insolvencies and as mentioned ... more

The answer to the question ‘when is a good time to close your solvent business’ is never an easy one. However, with capital gains tax and asset disposal relief both still working in your favour, if you are looking to close your solvent business then 2021 or early 2022, may well be the time to make the move. If not, you could see a much less favourable tax landscape in the future.

Good news for those planning a Members’ Voluntary Liquidation (MVL)

The answer to the question ‘when is a good time to close your solvent business’ is never an easy one. ... more

Groundhog Day - Government Extends various measures to assist struggling business

Why Groundhog Day you ask? Over the last 12 months, I have posted about various Governments measures brought in ... more

VAT Deferrals – What can you do now if you still have not got the funds to pay?

Believe it or not, it has been almost 12 months since businesses in the UK were first given an answer to the ... more

I thought I would provide some thoughts on how the change may affect you because, despite the budget not quite producing the fireworks some were predicting, it did have a lot worth discussing in there.

Budget 2021 – Thoughts from an Insolvency Practitioner

Like most people, I get several excellent emails and budget summaries every year and I would guess you do too. ... more

The Insolvency Service produce monthly figures for both corporate and personal insolvencies and to be honest I rarely comment on them. Partly because insolvencies are seasonal so increase in the first and third quarter of the year and decrease in the second and fourth quarter and partly because there is not much too talk about.   However, I feel that there is a clear trend and whilst on paper the trend appears to be good news it hides several issues which will hit the economy later in the year.

Company Insolvencies in January 2021 50% lower than January 2020, but is this good news?

The Insolvency Service produce monthly figures for both corporate and personal insolvencies and to be honest I ... more

Smart Business Recovery is pleased to welcome a new member of the team

Meet Sharon – an old and new colleague.

If you have been reading our blogs or social media recently you will probably have noticed that we are very busy at ... more

Looking ahead isn't always easy but despite 2020 begin one of the most unusual years ever for many of us, there are some signs of stability ahead.

Some optimism, some hope and a big dollop of realism – Insolvency and business in 2021

I am already on the third draft of this blog. Every time I managed to get pen to paper the Covid situation or ... more

Over the last few days, a number of extensions have been announced which it is hoped to assist business affected by COVID 19. These are as follows;

Government Extends various measures to assist struggling business

Over the last few days, a number of extensions have been announced which it is hoped to assist business affected by ... more

Will I get my money? The order of payment for creditors.

There is no such thing as a simple way to close a business. Whether it is an administration or a liquidation, the ... more

What’s left for you? What will the change to HMRC preferential creditor status really mean to SMEs?

Up until the early 2000s HMRC were a preferential creditor in cases of insolvency. When this changed in 2003 it was ... more

The Government Announces new rules regarding Pre-pack sales to be implemented.

The Government Announces new rules regarding Pre-pack sales to be implemented.

The Government has announced that new rules will be brought into legislation as soon as possible. The following was ... more

Measures put in place to protect businesses from insolvency will be extended to continue giving them much-needed breathing space during the coronavirus (COVID-19) pandemic, the government announced today (24 September). UPDATED 27 November 2020

Government gives businesses much-needed breathing space with extension of insolvency measures

UPDATED 26 NOVEMBER 2020 The Government has announced extensions to previous temporary measures relating to ... more

Taking stock – Are your customers stock levels a threat to your cashflow?

There is a potential situation arising that could soon be causing some insolvency related issues, cashflow problems ... more

Changes to the regulations surrounding insolvency could spell trouble for SMEs. This article takes a look at what some of these changes are and the impact they could have on cashflow.

Supplier beware – Credit control and the Corporate Insolvency and Governance Bill 2020

Insolvency legislation rarely makes the news which is probably why one of the biggest changes to the way it works ... more

Dividends, Overdrawn Loan Accounts and Insolvency - Updated

This is a very common problem in insolvency and here is the reason why!! At some stage, a director of a new ... more

Keep your cashflow forecast up to date – 5 tips and 1 warning

Why then are we bothering to dedicate a full article and video to cashflow forecasts if they are so common? Well, ... more

Since the Covid-19 pandemic insolvency has been on the minds of many business owners. Pressing the panic button is unlikely to be the right response though.

Am I insolvent? – Why pressing the panic button may not be the best idea.

The initial shock of the lockdown. When the government announced the Coronavirus lockdown our telephone began to ... more

Bankrupt, Insolvent or in need of rescue?

  What happens when you reach out to an Insolvency Practitioner?   I doubt any business owner ... more

Employee rights is an insolvency

What are employees entitled to in an insolvency process?

One of the major aspects of any insolvency is what will happen to the employees. Any news story in relation to an ... more

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