Company Winding Up

Company Winding Up

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Client wants to wind up their company, this is a new area for me so would appreciate any advice.   One Director company, £1 share capital, no creditors (all paid cash apart from me which they will settle before we close the bank accounts - & of course HMRC), bank balance will be approx £9k.   Companies first year end is 30 Sep 2011, plan to cease trading on 31st December.   Having read DS01 Form & notes, just wanted to check I'm on the right track:-

Presume I can't submit DS01 until after 31st March 2012 (3 months since ceased trading)

Is it best to change the accounting reference date to 31st December 2011 & have a 15 month period (need to submit Form AA01 to change ARD), in which case do I still need to submit accounts even though balance sheet will show zero (or do I submit 12 month accounts & make reference that the company will cease trading - if so, do I need to bother submitting the final 3 months accounts)

Need to record board minutes for ceasing trading, reduction of share capital & any directors dividends

Need to inform HMRC, is there a standard letter posted anywhere?   When contacting HMRC, do I need to send letters re corp tax & PAYE (what about end of year PAYE, presume I don't need to bother?)

... & finally, how much would you charge for this work.   Based on my client paying £1,000 annually, would £1,400 be too much to charge?   I'm thinking there maybe a bit of back & forth with the client plus correspondence with HMRC.   Would be interested to hear others views on charges as I can't exactly go back & ask for more once the bank account is closed!

Thanks in advance for anyone taking the time to comment.

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By Euan MacLennan
30th Nov 2011 10:38

I will make a start
Yes - the director would be telling a lie on form DS01 if it is dated within 3 months of ceasing to trade.If the company was incorporated in September 2010 or later, i.e: if the first accounting period has not already been extended, it would be sensible to extend it to the date of ceasing trade, so that you only prepare one set of accounts covering 15ish months from incorporation.  If you are applying to have the company struck off, you will not need to file the accounts at Companies House, but you will have to file them with HMRC.  You will have two CT accounting periods - one for the first 12 months of trading and the other for the remaining period up to cessation - and will have to submit separate CT returns for each CTAP.How can you reduce a share capital of £1?Unless the director is content to take the £9,000 as a dividend subject to income tax, which he might be if it does not put him into higher rate tax, you need to consider making an ESC C16 clearance application to HMRC to have the dividend treated as a return of the investment in the share, which would be subject to capital gains tax, in which case there would be no tax to pay as £8,999 is less than the annual exemption of £10,600.You would certainly need to file a 2011/12 forms P35 & P14, but you don't have to wait until May 2012 to do this.

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By irnbru
30th Nov 2011 20:45

Thanks again Euan

I really don't know how you find the time.   As always a constant source of useful information & advice!

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