MVL vs strike-off: which way should you close your solvent company?

You have stopped trading, the company is solvent, and there is money in the bank. There are now two doors out. Door one is voluntary strike-off: a £13 form (the DS01), filed online, no professionals required. Door two is a members' voluntary liquidation (MVL): a formal winding up run by a licensed insolvency practitioner, costing four figures. Which door you take is, in most cases, decided by a single number: £25,000.

This guide explains where that number comes from, works through the tax on a realistic example, prices an MVL honestly — including the parts some quotes leave out — and, because we would rather be useful than persuasive, sets out the cases where the £13 route is still the right answer.

The short answer

If your retained reserves are £25,000 or less, strike the company off yourself. Distributions up to that level are taxed as capital anyway, so paying £1,500 or more for an MVL would be buying a tax treatment you already have.

If reserves are comfortably above £25,000 and you pay income tax at the higher rate, an MVL almost always wins, even after the liquidator's fee. The rest of this guide is the working.

	Strike-off (DS01)	MVL
Best for	Reserves of £25,000 or less	Reserves above £25,000 (usually)
Tax treatment of distributions	Capital only if the total is £25,000 or under; otherwise the whole amount is income	Capital, whatever the size
Cost	£13 online (£18 paper)	£995–£2,995 in fees plus disbursements; roughly £1,600–£1,900 all-in for a simple case
Who runs it	The directors	A licensed insolvency practitioner — required by law
Timeline	About three months from filing	First distributions often within weeks; full completion commonly six to twelve months

The £25,000 cliff, explained

When a company is struck off rather than formally wound up, money paid to shareholders in anticipation of dissolution is treated as a capital distribution only if three conditions are met: the company's debts have been settled, debts owed to the company have been collected, and the total distributed is £25,000 or less. The rule sits in section 1030A of the Corporation Tax Act 2010, and the consequence of breaching it is blunt: go over £25,000 and the whole distribution — not just the excess — is taxed as income, at dividend rates.

A formal liquidation has no such cap. Distributions made by a liquidator in an MVL are capital distributions regardless of size, which means capital gains tax applies — and, if you qualify, Business Asset Disposal Relief (BADR) at 18%.

Worked example: £80,000 left in the company

Take a director and sole shareholder with £80,000 of retained reserves after everything is settled, who is already a higher-rate taxpayer from other income.

Route one: strike-off. £80,000 is over £25,000, so the entire amount is taxed as dividend income. After the £500 dividend allowance, £79,500 is taxed at the higher dividend rate of 35.75%. Tax: roughly £28,400. If the distribution pushed total income past the additional-rate threshold, part of it would be taxed at 39.35% and the bill would climb further.

Route two: MVL. The £80,000 is a capital distribution. Assuming the BADR conditions are met and there is lifetime limit to spare, the gain is taxed at 18%: £14,400. Add a realistic all-in liquidation cost of around £1,800 for a simple cash-only case and the route costs roughly £16,200 in total.

The MVL leaves this director about £12,200 better off. The figures ignore the small annual CGT exemption and assume the whole distribution falls within the higher rate band — an accountant will refine the edges, but the shape of the answer will not change.

A cliff, not a taper

It is worth being precise about how unforgiving the rule is. Distribute £25,000 on strike-off and it is all capital. Distribute £25,001 and all of it — every pound, not just the last one — is income. There is no marginal relief and no election to fix it afterwards. If your reserves sit anywhere near the line, count carefully before you file, and remember that assets distributed in kind count at market value alongside the cash.

What an MVL really costs

Gov.uk does not publish liquidators' fees because there is no statutory scale; it is a private market. As of June 2026, that market looks like this for a straightforward solvent company:

Item	Typical price (June 2026)
Liquidator's fixed fee — simple case (cash at bank, no liabilities, one or two shareholders)	£995–£1,245 + VAT
Liquidator's fixed fee — complex case (property, several shareholders, director's loans, s455 refunds)	£1,995–£2,995 + VAT, sometimes more
Gazette notices (statutory advertising)	around £351 + VAT
Insolvency bond (scales with asset value)	£55–£275 + VAT
Witnessing the declaration of solvency	£5–£100
Realistic all-in total, simple case	£1,600–£1,900 including VAT

Some firms band their fees by asset value instead — from about £2,000 for companies holding up to £100,000, rising to £5,000 at £5 million. Two things to watch in any quote: whether disbursements (Gazette, bond, witnessing) are included, and who is actually doing the work. An MVL must be conducted by a licensed insolvency practitioner under section 389 of the Insolvency Act 1986 — anyone offering an "MVL" without one is offering something else. Our own MVL service runs through a licensed IP partner; the details are at our MVL page.

How long an MVL takes — and who sets the pace

The statutory opening moves are quick. A majority of directors sign a declaration of solvency before a solicitor or notary, stating that debts plus interest can be paid within at most twelve months. Shareholders must pass the winding-up resolution within five weeks; the resolution is advertised in The Gazette within fourteen days and the declaration filed at Companies House within fifteen.

The money usually arrives early. Efficient liquidators commonly distribute the bulk of the cash within five to nine weeks of appointment. What takes the time is the ending: the liquidator cannot close the case until HMRC has confirmed it has no objection to the company's final tax position. A clean, cash-only company with its final returns already filed can complete in three to six months; six to twelve months is common where the tax affairs need tidying first. The practical lesson is to get the final accounts, Corporation Tax return and VAT deregistration sorted before the liquidator is appointed, not after — our guide to final accounts and HMRC clearance covers the sequence.

When strike-off still wins

• Reserves at or below £25,000 — always. You get capital treatment without a liquidator, and the DS01 costs £13 online. Anyone selling you an MVL here is selling you nothing.
• Modest reserves above the cliff, basic-rate taxpayer. The cliff is a cliff, but dividend tax at the basic rate is 10.75%. On £30,000 of reserves, strike-off costs a basic-rate taxpayer roughly £3,200 in tax; an MVL would cost about £5,400 in CGT plus around £1,800 in fees. Strike-off wins by some £4,000. The MVL arithmetic only becomes compelling when higher-rate dividend tax is the alternative.
• You can get under the line legitimately. Final salary, employer pension contributions and ordinary dividends spread across a tax year or two can bring reserves below £25,000 before you apply. This is standard planning, not a wheeze — but it is an accountant conversation, not a DIY one.
• You plan to carry on the same trade. A targeted anti-avoidance rule can recharacterise MVL capital distributions as income if you start a similar business within two years and a main purpose was the tax saving. If a phoenix is in your plans, take professional advice before paying for capital treatment you may not keep.

If strike-off is your route, respect its mechanics: no trading or name change in the previous three months, copies of the DS01 to every interested party within seven days (failure carries an unlimited fine, and up to seven years' imprisonment where concealment was intended), then a Gazette notice and a two-month objection window before dissolution — about three months end to end. Empty and close the bank account first: anything the company still owns at dissolution passes to the Crown as bona vacantia. The full sequence is in our guide to striking off a company.

Distributions in specie: when the company owns more than cash

Not everything has to be sold before a company closes. A liquidator can make a distribution in specie — transferring assets to shareholders at market value rather than converting them to cash first. Property, vehicles, plant and even the right to repayment of a director's loan can all pass this way. Some liquidators will distribute in specie within a day of appointment against a shareholder indemnity, and firms that publish rates tend to price it as its own tier, from around £1,995 plus VAT.

Two cautions. First, if you are striking off rather than liquidating, assets you take in kind count at market value towards the £25,000 limit — a company van and £20,000 of cash can breach it together. Second, transferring assets can carry tax consequences of its own, particularly with property. This is precisely the sort of detail an MVL quote should address before you sign.

From 10% to 18%: a short history of BADR

Business Asset Disposal Relief has been on a ratchet. The CGT rate was 10% for disposals up to 5 April 2025, 14% during 2025/26, and has been 18% for disposals on or after 6 April 2026. The lifetime limit remains £1 million. Crucially, the date that matters is the date of each capital distribution, not the date the liquidator was appointed — and anti-forestalling rules caught arrangements designed to straddle the change. The result was a well-documented rush of MVLs before April 2026.

On our £80,000 example, the same MVL would have cost £8,000 in tax in 2024/25, £11,200 in 2025/26, and £14,400 today. Each April took roughly £3,200 more. So has 18% killed the MVL? No. Against higher-rate dividend tax at 35.75%, capital treatment at 18% still saves nearly eighteen percentage points — about £12,200 on £80,000 after fees. The relief is less generous than it was; it is not gone.

The qualifying conditions deserve a sober read: for the two years before disposal (or before the company ceased trading) it must have been your personal company — at least 5% of shares and votes — you must have been an officer or employee, and it must have been a trading company. After cessation, distributions must land within three years. The claim goes through Self Assessment.

So: MVL or strike-off?

Under £25,000 of reserves: strike off, keep the capital treatment, spend £13. Comfortably over it as a higher-rate taxpayer: the MVL fee is usually the cheapest tax advice you will ever take. In between — modest reserves, basic-rate income, or a plan to trade again — the answer turns on your numbers, not on anyone's sales page.

If you would like to know which side of the line you are on, our free route check takes a few minutes and asks for no payment details. It will tell you plainly if strike-off is enough — and if it is, our Guided Wind-Down (£299, currently £199 at launch) sequences the filings, while genuine MVL cases go to the licensed insolvency practitioner behind our MVL service. And if your reserves are under £25,000 with your filings up to date, the honest answer may be that you do not need to pay anyone at all.