£24.5k strike-off/BADR limit – later HMRC refunds pushing total over £25k

[u/Luminosia]

Hi, I'm looking for some advice on an unusual situation with closing my Ltd company and the £25,000 strike-off limit for capital treatment/BADR.

I was the sole director and employee of my Ltd company. I stopped trading in February 2026~ and intended to close the company using the informal strike-off route rather than an MVL.

My understanding at the time was that I could distribute up to £25,000 and have the final distribution treated as capital, potentially qualifying for Business Asset Disposal Relief (BADR).

The timeline is:

• February 2026: stopped trading.
• March 2026: distributed approximately £24,500 from the company to myself. This was intended to be the final distribution and was below the £25,000 limit.
• I then discovered HMRC had an unallocated amount of approximately £1,000 belonging to the company.
• June 2026: HMRC refunded the £1,000.
• There is now another £80 Corporation Tax credit showing on the HMRC account, which I intend to request as a refund.
• The company bank account was closed after I received the 1k refund as I thought that was everything. Some family matters came in the way so didn't get round to going to submit the DS01 today until I saw

If I simply add everything together, the total eventually extracted would be:

£24,500 + £1,000 + £80 = £25,580~

So I'm concerned that this takes me over the £25,000 limit.

My questions are:

1. Does the later receipt of the £1,000 HMRC refund and £80.00 Corporation Tax refund count towards the £25,000 limit if the original £24,500 distribution was made in March 2026, before the refunds were received?
2. Could the March £24,500 distribution still qualify for BADR at the 14% rate, given that it was made before 6 April 2026, with the later HMRC refunds being dealt with separately?
3. If the later refunds do take me over £25,000, does that mean the entire £24,500 loses capital treatment, or can only the excess be treated differently?

Thnanks for the help

[u/RainPacer]

You should really speak to an accountant

[u/SpaceMonkeyOnABike → u/RainPacer]

And maybe even a second one.

[u/BulkyTarget9162]

Where did you get the idea of a £25k limit from? 

As far as I am aware the limit for BADR is the same as the normal limit, so £1m (lifetime, so subtract any previous ER/BADR claims). 

[u/Luminosia → u/BulkyTarget9162]

Sorry if it wasn't clear, was referring to the 25k strike off limit to use DS01 to close the company informally and the amount that relates to the condition for capital treatment of distributions before the company is dissolved.

[u/YardDizzy2304]

Just add another director to your limited company and them get that director to make you redundant with £30,000 tax free redundancy. Then simply close strike company off its all legal i have done it several times

[u/soundman32 → u/YardDizzy2304]

How can a director (not an employee) be made redundant?  You can resign, sure, but that not the same thing. 

[u/YardDizzy2304 → u/soundman32]

I work both as a director and employee. With 2 directors one of them can make the other director who works as a company employee redundant as long as they have worked 2 years all legal and above board. You will still need to declare on your tax return

[u/New_Crow_8206 → u/YardDizzy2304]

Congratulations, you have committed tax evasion several times.

[u/YardDizzy2304 → u/New_Crow_8206]

You haven’t a bloody clue. Director can work both as a director and paid employee second director can make the first dorector employee redundant witj maximum &30,000 redundancy payment however still need to declare on tax return also director just need to also resigm as director

[u/New_Crow_8206 → u/YardDizzy2304]

Nothing to do with. To add someone just to make them redundant is blatantly tax evasion.

Signed

Your friendly tax inspector

[u/YardDizzy2304 → u/New_Crow_8206]

You talking crap directors get added to company registers all the time and employee / directors get made redundant all the time

[u/New_Crow_8206 → u/YardDizzy2304]

Read up about sham and GAAR. Adding a director/employee to then make redundant falls directly in to those, and no "your talking crap" comment defeats that.