Members’ Voluntary Liquidation (MVL)
If your company is solvent and you’re ready to close it down for retirement, restructuring or a new venture, a Members’ Voluntary Liquidation (MVL) could be the right route.
Why choose the Liquidation Centre?
- In-house licensed insolvency practitioners
- Over 20 years of liquidation experience
- Fixed, transparent fee
What is a Members’ Voluntary Liquidation (MVL)?
A Members’ Voluntary Liquidation (MVL) is a formal process for closing a solvent limited company and distributing its remaining assets to shareholders.
To enter an MVL, the directors must make a statutory declaration of solvency confirming that, having reviewed the company’s affairs, they believe it can pay all its debts, together with interest at the official rate, in full within a period not exceeding 12 months.
Once the liquidation is complete, the company is dissolved at Companies House.
An MVL is different from a Creditors’ Voluntary Liquidation (CVL), which is generally used to close an insolvent company that cannot pay its debts in full.
Is an MVL right for your company?
An MVL may be worth considering if your company has served its purpose, you’re ready to move on to something new, or you want to release cash that’s built up in the business.
Signs an MVL might be the right choice for your company:
- You’re retiring or moving onto something new
If you’re ready to retire or start another business, an MVL provides a formal way to close your existing company and distribute its remaining assets. However, if you intend to continue a similar trade, specific tax rules may affect how those distributions are taxed.
- Your company has completed its purpose
Some companies are set up for a particular project, contract or period of trading. If that work has finished and you no longer need the company, an MVL can help you bring its affairs to an orderly close.
- You’re moving abroad
If you’re relocating and no longer need your UK limited company, an MVL may allow you to deal with its remaining assets and liabilities before moving on.
- Your company has built up retained profits
If your company holds substantial cash or other assets, an MVL may provide a tax-efficient way to distribute them to shareholders, depending on your circumstances and eligibility for relevant tax reliefs.
- You’re a contractor closing your limited company
If you’re leaving contracting, moving into permanent employment or stopping work altogether, an MVL may help you close your company and release the funds it has built up.
For more information, read our article on when you should consider solvent liquidation.
Are you eligible for an MVL?
An MVL may be appropriate if:
- Your company can pay all its creditors in full, together with interest at the official rate, within 12 months of entering liquidation.
- You have identified outstanding tax liabilities and other debts.
- Your company’s accounts and tax returns are up to date, or you have a clear plan to bring them up to date.
- You know what the company owns and what it owes.
- You understand the likely costs of liquidation and the amount available to distribute to shareholders.
- If you intend to claim Business Asset Disposal Relief (BADR), you understand the relevant qualifying conditions.
Although an MVL can be used for companies with different amounts of assets, the costs may outweigh the benefits for companies with smaller amounts to distribute. If the total distributions to shareholders do not exceed £25,000, a voluntary strike-off may be a more cost-effective alternative, depending on the company’s circumstances and the applicable tax treatment.
If you’re unsure whether your company qualifies, our team can discuss your circumstances and explain your options.
What if your company has debt?
An MVL is only suitable for a solvent company that can pay its debts in full. together with interest at the official rate, within 12 months. If the directors cannot reasonably be confident that the company can meet this requirement, an MVL may not be appropriate.
A Creditors’ Voluntary Liquidation (CVL) or another insolvency procedure may need to be considered instead.
Read our guide to CVL or MVL to understand the differences.
Why choose the Liquidation Centre for your MVL?
Because closing your company involves important financial and legal decisions, it’s important you know what the process involves, what it will cost and how your assets will be dealt with.
At the Liquidation Centre, our aim is to make the liquidation process as simple as possible.
With Liquidation Centre, you get:
- In-house expertise: Your liquidation will be handled by licensed insolvency practitioners with over 20 years’ experience in the MVL process.
- Fixed, transparent fees: All costs are clearly explained before the process begins.
- Support throughout: You’ll have a dedicated account manager guiding you through each stage of the liquidation, keeping you informed and answering your questions.
If you’re considering an MVL, speak to our team today for a free, no-obligation chat about your business.
Tax benefits of an MVL
One of the main reasons directors consider an MVL is the potential tax treatment of the money distributed when the company closes.
MVL distributions to shareholders will normally be treated as capital distributions rather than income. Depending on your circumstances, this may be more tax-efficient than extracting the same funds through salary or dividends.
If you meet the qualifying conditions for Business Asset Disposal Relief (BADR), qualifying gains are subject to Capital Gains Tax at 18% for disposals made from 6 April 2026, up to the £1 million lifetime limit.
How does an MVL compare
with other ways of taking money out of a company?
| Method of extracting funds | General tax treatment | What to consider |
|---|---|---|
| Members’ Voluntary Liquidation | Distributions are normally treated as capital. | You may qualify for BADR if all relevant conditions are met. |
| Dividends | Dividend tax rates of 10.75%, 35.75%, or 39.35% for the basic, higher and additional rates. | The rate depends on your income, tax band and personal circumstances. |
| Salary | Income Tax at up to 45%, plus applicable National Insurance contributions. | The overall tax cost will depend on your circumstances and salary. |
These rates are general guidance for the 2026/27 tax year. Your actual tax position may differ depending on your income, allowances and other circumstances.
How much does an MVL cost?
The cost of a Members’ Voluntary Liquidation depends on your company’s circumstances and the work needed to close it.
Factors that can affect the cost include:
- The size and complexity of the company.
- The number of shareholders.
- The value and type of assets held.
- Whether the company owns property or other complex assets.
- The amount of work required to deal with creditors and liabilities.
- The time needed to resolve outstanding matters and obtain the necessary clearances.
At the Liquidation Centre, our MVL fees start from £1,499, with the final cost depending on your company’s circumstances. Additional costs include Gazette notices and the insolvency practitioner’s security bond which protects company funds against losses arising from fraud or dishonesty.
We’ll explain all costs upfront, and in most cases, the fees are paid from company funds before distributions are made to shareholders. For a full breakdown, see our guide to how much an MVL costs.
Can I get a cheap MVL?
If you’re looking for a cost effective MVL, you should always look at the total cost and what is actually included with the services, rather than just choosing a provider based on the lowest fee you find.
A cheaper quote may end up costing you more in the long run if the service doesn’t actually cover what your business needs, or extra costs that weren’t disclosed at the start are added later in the process.
Want to know what your MVL is likely to cost for your company? Contact us for a free discussion or get a quote today.
Our Members’ Voluntary Liquidation Process
Most MVLs can take around 3-6 months to complete, although the actual timeline can vary depending on the company’s assets, outstanding liabilities and HMRC clearance.
Stage 1: Declaration of solvency
The directors review the company’s financial position and make a statutory declaration confirming that, having made a full inquiry into its affairs, they believe it can pay all its debts, together with interest at the official rate, within a specified period not exceeding 12 months. The declaration must be made within five weeks before the resolution to wind up the company and include a statement of its assets and liabilities.
Stage 2: Shareholder approval
The shareholders pass the necessary resolutions to place the company into an MVL and appoint a licensed insolvency practitioner as liquidator. The liquidation begins when the winding-up resolution is passed, with the required notices and filings completed within the statutory deadlines.
Stage 3: Asset distribution
The liquidator collects the company’s assets, settles outstanding debts and liabilities, and distributes the remaining funds to shareholders. Depending on the company’s circumstances, an initial distribution may be possible within 7 days after the liquidator’s appointment, with any remaining funds distributed as the liquidation progresses and outstanding matters are resolved.
Stage 4: Final closure
Once the company’s affairs have been fully wound up, the liquidator prepares a final account and completes the required filings with Companies House. The company is normally dissolved three months after the final return is registered, bringing the MVL process to its conclusion.
Members’ Voluntary Liquidation and HMRC
During the MVL process, the liquidator will deal with HMRC on the company’s behalf, checking that the necessary tax returns have been submitted, liabilities have been settled and any refunds due have been received.
HMRC no longer provides formal tax clearance for an MVL. Instead, the liquidator will liaise with HMRC to establish the company’s outstanding tax liabilities and ensure these are settled before the liquidation is finalised. Delays in resolving tax matters can affect how long the MVL takes to complete. Where possible tax matters are often resolved before a company enters liquidation .
The liquidator will ask HMRC to pay any refunds into the liquidation account. Where necessary, arrangements may also be made with the bank to keep the company’s existing account open until outstanding funds have been received.
Do I need a solicitor for an MVL?
You don’t usually need a solicitor to complete a MVL. The process must be handled by a licensed insolvency practitioner, who acts as liquidator and manages the company’s affairs, including its assets, liabilities, distributions and required paperwork.
What does the liquidator handle?
Your licensed insolvency practitioner manages the liquidation, deals with Companies House and HMRC, and distributes assets to shareholders.
When you might need a solicitor
You may need separate legal advice prior to the appointment of a liquidator if your company has a property transaction, contractual dispute or another complex legal matter.
The directors must also make a statutory declaration of solvency, which needs to be formally sworn or affirmed before a solicitor or other authorised person. At the Liquidation Centre, we can help arrange this through a video appointment, making the process straightforward and convenient.
Ready to close your company?
If your company is solvent and you’re considering retirement, a new venture, moving abroad or want to bring your company to an end, an MVL may provide a structured and potentially tax-efficient way to distribute its remaining assets.
At the Liquidation Centre, our licensed insolvency practitioners will guide you through the process, clearly explain the costs involved, and work alongside your accountant to help bring your company to an orderly close.
Get in touch today for a free, no-obligation discussion or request your MVL quote.