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Fee for closing down company

Fee for closing down company

My limited company clients pay my fees by standing order, three months in arrears.

One client (IT contractor who is sole director) wishes to close his limited company.  The company can pay its debts, so it will be a simple closure.  I have not acted for a company closure before, so although I am well aware of the process I must follow, I am less certain of the fees that should be charged.

The client's year end is 31st March, and they will pay a final instalment of fees for the 2011-12 tax year on 30th June, which is around the date that the company will cease trading.  No fees have yet been paid for the 2012-13 tax year.

I am minded to charge the client half a year's fees to close down the company, given that I will still need to prepare 2012-13 company accounts, corporation tax return, P35,  VAT return, and of course carry out all of the correspondence with HMRC, Companies House etc, while of course bearing in mind that all of these processes will be quicker than usual because only one third of a year's transactions are included.

Included in the annual fee is the preparation of the director's self assessment tax return, and I am not sure whether it would be appropriate to include this work in the final fee given that the tax return will be prepared several months after the company has closed.  I would prefer not to but again, am unsure of the scope of work that is usually included in a company closure.

I would be interested to hear from more experienced practitioners whether they would agree with this approach or whether my proposed fees are too high or too low.

Many thanks in advance.

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21st Jun 2012 17:52

Looking on the positive side, perhaps the lack of replies should be viewed as a sign of economic recovery if no limited companies are closing down these days!

On the other hand, if anyone has any experience I would welcome your thoughts...

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21st Jun 2012 18:15

I'll try :)

Given that your client is an IT contractor, most of which are 'low volume' in regard to the number of transactions, I would keep the fee the same. Cessation accounts need a little more work anyway.

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21st Jun 2012 19:39

I'm at 3/4s of the annual fee. Three months of trading yes, but special work for dealing with strike off. Any cash in the company. How extract?

He's a contractor so has been avoiding tax much worse than Mr Carr (cos they should all be employed!!) so just hoick your fees up this once.

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22nd Jun 2012 18:29

Many thanks for the helpful comments, much appreciated.

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23rd Jun 2012 11:53

Extend the accounting period

... to 30 June 2012 (or whatever the actual date of cessation may be) and prepare the statutory accounts for the 15 months (or whatever).  Charge your normal annual fee for the accounts (3 months of extra transactions are not going to add to the time taken to prepare the accounts) plus perhaps, a bit extra for the second CT return.  If you think that preparing and filing a form DS01 at Companies House takes time, charge a bit extra for that.  Perhaps, let his standing order run on for 2 or 3 more months to cover the incidental costs of closing the company.

I trust that you do not charge the fee for preparing the director's personal tax return in the company's accounts.

 

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