BUSINESS owners planning to close their companies have been warned about a tax clampdown.

HM Revenue & Customs has announced a clampdown on tax breaks available to company shareholders when they close their company on a voluntary basis.

David Butterworth (pictured), of Huddersfield chartered accountants Wheawill & Sudworth, said it would be more difficult and expensive to extract remaining company monies once the new rules are in place.

“At present, it is possible for shareholders to receive distributions from a company in wind-down either tax-free or at a very low tax rate without a great deal of hassle” he said.

“Under the new regime, only total distributions up to £25,000 can be dealt with in this manner and larger amounts will require a more formal and costly procedure.”

It is proposed that the new rules will be effective for distributions made on or after March 1, 2012.

Mr Butterworth said companies in the process of winding up should proceed to make distributions to shareholders before this date where it will be more tax-efficient to do so.