HIGH numbers of bosses are “cashing out” of their businesses by liquidating companies when they are still solvent, business recovery experts have said.

Portland Leonard Curtis paid out more than £26million in 2021 through members’ voluntary liquidations (MVL) of 76 businesses, including local firms and national brands.

Those businesses included software developers, a long-established marketing and PR agency, a professional golf retailer, a specialist medical practice, property developers, investment companies and several IT and management consultancies, the firm said.

Portland Leonard Curtis, formerly called Portland Business Recovery, has offices in Whiteley and Poole and became part of the Leonard Curtis Business Solutions Group last year.

Southampton-based Leonard Curtis already had 239 people in 19 offices and the wider group saw 433 MVL appointments last year, distributing more than £231m to shareholders.

Portland Leonard Curtis director Carl Faulds said: “Despite many businesses struggling in 2021, a number were well positioned to take advantage of the changes in buying habits and are now looking to extract capital on a tax efficient basis and utilise the lower rates of tax payable on capital gains.

“For others burdened with Bounce Back Loans, Coronavirus Business Interruption Loans, landlord debts and HMRC arrears, all payable out of future profits, maintaining cashflow whilst the recovery takes place will be crucial.

“As part of the larger group with access to additional services, we are well positioned to be able to help businesses of all sizes deal with the financial consequences of the pandemic.”

A members’ voluntary liquidation typically happens after a company’s business has been sold or the business comes to the end of its natural life. It results in shareholders receiving a return on their investment in a tax efficient way, usually with the benefit of business asset disposal relief – formerly known as entrepreneurs’ relief.

Portland’s deal with Leonard Curtis also enabled the group to add more service lines to its existing capabilities, especially around cashflow support and commercial finance, to support businesses facing financial difficulties and drive recovery.