I have a client who never listens.....anyway, earlier this year I advised him that it would be a good idea if going forward we close his Ltd Company (he’s sole director and shareholder) and operate as a sole trader as he is incapable of dealing with the admin involved in running a limited company.
To my surprise I have just been advised that the company has been dissolved... great, he did listen! However.... the company year end was Sep; I completed the last set accounts for Sep 2015. The company traded from Oct 15 up to May 2016. I need to do accounts for this period and submit a tax return. But as the company is now dissolved, what do I do???
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There is nothing you need to do. The company is dissolved and doesn't exist any more. If the company had assets they would have been transferred to the Crown.
HMRC have cancelled the UTR number. If you want to submit the return, you have to post it to them with a covering letter. I did this with a client and they accepted it, do not forget to include the accounts
HMRC have cancelled the UTR number. If you want to submit the return, you have to post it to them with a covering letter.
You don't have to do any such thing. What would be the point?
If you need to do the personal tax returm, how would you show where you got the money from? If the client bought assets and the revenue query your return, you would need to show that the company paid tax on the dividends he recieved. If he wants a mortgage he has to show income from his company.
Companies don't pay tax on dividends, last I heard. And HMRC would not provide information to his mortgage company in any circumstances.
Yes but in order for you to receive the dividends, the company must have made a profit and hence pay CT. You just can not declare dividends and not show where it has come from. This basic accounting.
It will be us as accountants who provide mortgage information together with the SA302 from HMRC
Yes but in order for you to receive the dividends, the company must have made a profit and hence pay CT. You just can not declare dividends and not show where it has come from. This basic accounting.
What a pile of nonsense. If the company has paid him dividends then it will have provided him with the relevant tax voucher(s). That is all the evidence that he needs to support the entries on his tax return. If you seriously think that HMRC are then going to check whether or not a dissolved company had sufficient reserves to pay the dividends then it is about time that you returned to Planet Earth.
So who will sign the accounts and the tax return? There no company and therefore no director or liquidator who would have authority to sign.
How will you be paid? The company assets belong to the Crown and there is no one to sign a cheque and anyway the bank will have (should have?) frozen the account.
Do nothing. I would go to the pub instead,
If there is unpaid tax for the period before dissolution, presumably you have to consider your AML reporting obligations?
If the assets of a dissolved company go to the Queen do not the liabilities follow them? So if there is unpaid tax HMRC ought to chase HM.
Maybe you need to report her for possible money laundering.......
If the assets of a dissolved company go to the Queen do not the liabilities follow them? So if there is unpaid tax HMRC ought to chase HM.
Maybe you need to report her for possible money laundering.......
Presumably company was struck off
Are there tax liabilities
Are there other creditors
What about your outstanding fees, unbilled or billed to the non existent company.
Are you going to bill the director personally
Tax liabilities of which HMRC may be unaware, if not disclosed to HMRC renders you at risk or client at risk.
There are deeper issues here, to address
David Winch may add his views, if reading this.
..... I’m pretty sure there will be some tax due for the period and I need to know how I go about disclosing this??
The client is stupid but 100% honest.
I hope your client does not read that last line.
The poster, who said he used a paper CT600, is the way I would go, and use the UTR etc that was active upto the dissolving of the company.
Then you will have all the details for him to continue the business under self employment.
As many users have already said, you don't need to disclose this.
Corporation tax is the liability of the company. The company no longer exists. Therefore there is no longer an entity with a liability.
You need to check why the company was struck off. If it was a request for strike off submitted by your client they may have a problem. They are legally required to inform all creditors, which would include HMRC. (as CT was due) so they can object to strike off if they wish to pursue their debt. It seems likely from your description of them that they will not have done so. This breach could allow HMRC to pursue them personally for the debt instead.
Whether HMRC will try to do so is another matter. Past experience says that, without a CT return telling them something is due, it is unlikely.
If HMRC are so minded they could apply for the company to be reinstated and investigate it's affairs.
So I wouldn't stir them up by attempting to submit accounts
On what date was the company dissolved?
What are the amounts involved?
and more....
This needs an accountant to look at the detail and do a few sums and then advise.
Tony S - if Ronny123 is your accountant you need to get a proper one.
I suggest you google the Dead Parrot sketch.
Watch it carefully and consider the company as if it was the parrot.
As said the company is dead and buried. HMRC are advised by CoHse of pending "Strike-offs", giving HMRC an opportunity to object. In this case they did not, that is that.
If a personal tax return is needed, you complete it as usual. With the company dividends. Just ensure you have the paperwork required for payment of dividends. (resolutions & dividend vouchers)
I do not follow your comment about admin for one-man company. Under present rules regarding accounting records, I do not see this as being any more onerous that being a sole trader.
Is the problem you missed out on a year's acs fees?
Why were you not aware of the three successive Co.Hse warning warning of dissolution?
You do not say why the company was struck off.
If the co was still trading but director filed a form DS01 within three months thereof, that is an offence.
Politely, gently, but firmly, were you doing your job properly?
Do nothing. You couldn't anyway as you wouldn't be able to file electronically using company references anyway.
Only issue would be the assets (if any) technically now belong to the crown estates
Do nothing. You couldn't anyway as you wouldn't be able to file electronically using company references anyway.
Only issue would be the assets (if any) technically now belong to the crown estates
Its the crown, not the Queen that any assets belong too!! As for unpaid tax & money laundering......... keep taking the medication Jackie bhoy
Sorry - I had not noticed that you had ticked the box saying that you did not have any sense of humour.