New Research Confirms the Member Voluntary Liquidation Process (MVLs) Is Working WellPosted: Aug 6, 2026

As a rather fortunate coincidence to our article, Thinking About Retiring This Summer? It May Be Time to Explore an MVL, the Insolvency Service has published a study of Members’ Voluntary Liquidations in England and Wales.

There is a lot to unpick in the details but, in simple terms, it is very positive news if you are considering an MVL.

MVLs Under the Microscope.

As a quick reminder, a Members’ Voluntary Liquidation, or MVL, is a formal process for closing a solvent company. It allows the company’s outstanding liabilities to be settled before the remaining assets are distributed to its shareholders. MVLs are used for a variety of reasons, but probably the most common is to close a solvent company in a tax-efficient way so the Directors can retire.

The recent Insolvency Service study examined 2,309 MVLs started between 2016 and 2024. The purpose of the research was to ‘improve understanding of the MVL landscape’. In short, what was and wasn’t working as well as how it was performing.

Not to paraphrase too much, but essentially it found that the process is generally doing exactly what it is intended to do.

As a snapshot of some of the findings: Not to paraphrase too much, but essentially it found that the process is generally doing exactly what it is intended to do.

• Creditors were paid within 12 months in 95% of the closed cases examined.
• In cases that had been completed or had reached the final reporting stage, 99.8% achieved full creditor recovery.
• The median cost of an MVL was just 1.8% of the assets realised, while only seven of the 2,309 cases had to be converted into insolvent Creditors’ Voluntary Liquidations.

Those really cannot be seen as anything less than very reassuring figures.

Why are MVLs so Important?

MVLs are often discussed primarily in terms of potential tax in relation to the distribution of final assets to the shareholders. While this is understandably an important consideration for directors, it’s also worth taking a moment to think about the wider purpose of the process.

A properly managed MVL provides an orderly and regulated way to close a solvent company. It ensures that creditors are dealt with, the company’s affairs are concluded correctly, and the remaining value can be returned to shareholders. This study certainly supports that it achieves those objectives in almost every case. Not only that, but it does so while keeping costs proportionate to the assets involved.

Good news for anyone considering the MVL route.

Why the Study Matters.

The report supports the point we made in our earlier article. An MVL is a planned exit process for a financially healthy company and a viable option on the road to your retirement. If you are considering the next chapter in your life, including stepping away from a family business, or closing a company that has completed its purpose, an MVL should not be seen as an emergency measure or something to arrange at the last minute. It is a controlled exit.

So, of course, we are not saying that the findings mean that every MVL is straightforward or that it will be right for every company. It isn’t always that simple and it must be done right. For an MVL to be appropriate, your Insolvency Practitioner will want to be sure the business can pay all its debts, including interest, within the required period. Assets, liabilities, outstanding contracts, tax matters and potential creditor claims all need to be carefully considered, as well.

However, the research provides strong reassurance that when an MVL is appropriate, and properly managed by a licensed insolvency practitioner, it is an effective and cost-efficient way to bring a solvent company to a close.

If retirement or closure is becoming a serious possibility, an early conversation can help you understand whether an MVL is suitable and what preparation may be needed. Call us or book an appointment online and let’s look at how we can help. Certainly, this report suggests considering a well organised MVL may well be a great option.

This article provides general information and, as every case is individual, it is a general guide only and does not constitute legal or tax advice. Individual circumstances vary a lot, so appropriate professional advice should be obtained to help you make the right choice.