Q for Euan (maybe?)

Posted by Anonymous PM | on Sun, 14/03/2010 - 19:20 653 7 comments | report

Hi,

Say, a company has £100k in cash, matched by £99k reserves and £1k share capital.

Say also, the company has ESC 16 clearance from HMRC in respect of its final distribution. Say it writes the £100k to the shareholder today 14th March and the company is to apply to be struck of in due course.

Year end is 31 March 2010. At that date balance sheet is NIL. What is the position with the year end accounts? No assets, no share capital (<£4k so bona vacatia ignored).

Do we need to prepare any accounts?

Bread and Butter for Euan, if he is there?

Comments

probably not

stephenkendrew | Mon, 15/03/2010 - 07:03 | Permalink

I assume the company didn't trade during the year ending 31 March 2010 otherwise I wouldn't have thought that HMRC would have agreed to ESC C16. If the company hasn't traded then HMRC do not require a corporation tax return or accounts.

Once a form DS01 has been submitted to Companies House then they are not bothered any more about accounts.

not euen but...

zarathustra | Mon, 15/03/2010 - 09:27 | Permalink

No more accounts required for companies house, as previous poster says. However, I would send in a schedule to HMRC showing how the remaining funds have been dealt with since last balance sheet date. If you have not already submitted last years accounts to HMRC, just send it with that.

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Anonymous | Mon, 15/03/2010 - 10:02 | Permalink

The company was not dormant during the year to 31 march 2010. It traded until april 09. Are we saying that we need to wait one complete year with no trading so that we can then apply for esc c16. That would seem strange.

Is this hypothetical?

Euan MacLennan | Mon, 15/03/2010 - 11:25 | Permalink

HMRC are unlikely to agree to ESC C16 until they have a CT600 to the cessation of trading - that now appears to be 30th April 2009 (do not forget that the filing deadline for that is 30th April 2010). That will obviously involve preparing accounts to cessation of trading for HMRC, but as the others have said, Companies House will not be interested.

You can apply for ESC C16 (i.e: capital gains treatment of the final distribution) at any time after cessation - either before the final CT600 has been submitted (although it is unlikely to be approved until the CT600 is in) or even after the final distribution (for "retrosopective" CG treatment).

You can apply to Companies House to have the company struck off at any time after 31st July 2009 because you have to give the undertaking on form DS01 that the company has not traded for the previous 3 months. After ceasing to trade, the company is free to collect its debtors, pay off its creditors and settle its affairs, including making distributions, whether revenue or capital. Make sure that you have got the assets out of the company and closed the bank account within the 3 month notice period after submitting the form DS01.

I don't agree

Anonymous | Mon, 15/03/2010 - 14:19 | Permalink

" .......and the company is to apply to be struck of in due course."

If the company has not yet applied to be struck off then accounts are needed despite that fact that the balance sheet totals are nil. It is surely only when the DS01 is filed that the need for accounts falls away.

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Anonymous | Mon, 15/03/2010 - 15:15 | Permalink

That is my issue and the Question that was asked. I don't think that it has been answered yet!

.

Anonymous | Tue, 16/03/2010 - 17:41 | Permalink

Euan,

The point was not hypothetical. In this case we have applied for ESC clearance last week and we would expect to get it. We have had clearance in the past in a similar situation.

The point about it (clearance) not being granted until after the submission of the CT600 up to cesation of trade, is not relevant I dont think.

My problem is, if clearence is granted this week and the funds cleared out prior to 31 March 2010, what will the journal entry be in the stat accounts and for the payment? DR Rerseves £99k, DR Shares £1k, CR Bank £100k??