Hi - I've been recommended to this website by a friend to get some impartial advice if possible please.
During a business start-up scheme I set a limited company up with a co director. During our time on the start-up scheme we received grant payments of ~£15k used for all setup costs (office, equipment etc) - all payments were made in arrears so the money was claimed as expenses. The idea never took off and we never made a sale as such.
Our accountant filed our annual accounts last year for us, however since then we have not made any profit, only make a few purchases for the business itself.
There are no assets, and the remaining expense money has been transferred out of the business account.
We need to strike the company off as we can't afford the accountant bills (at around £500).
I have a DS01 completed and signed by both directors along with the £10. Reading other posts I have seen companies stopped by HMRC as no CT600 has been filed. Are we able to communicate with HMRC in any way and explain the situation stating that no CT is due?
To top things off the accounts are due by the 31.03.13. If we file the DS01 tomorrow would it be processed in time before we were issued with the £150 fine?
I appreciate your help - I've lost plenty of sleep over this and my accountant has not been happy to answer questions at all.
Thanks.
Replies (12)
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Yes you can
In a case like this I'd write to HMRC before 31 March, sending a copy of the signed DS01 and explaining the situation (as you've set out above) in particular that the company has made losses since the last set of accounts and has no funds to pay for accountancy fees to prepare the accounts or CT600.
You might actually want to list down whet the company has spent since the last accounts, just to back up your position.
To be honest I'd be surprised if HMRC kick up a fuss, you are not the sort of case they want to catch, and even if they did render a fine, I presume the company has no money to pay it anyway.
Good Luck
Write to HMRC and strike off
Firstly write to HMRC (quoting your corporation tax reference number) to tell them that the company has ceased trading, has made no sales since the previously submitted tax return, has no outstanding taxes (although if it does these need to be settled) and that you intend to strike it off.
HMRC usually don't bother to acknowledge such letters, so don't expect a reply.
Provided that the company has no creditors (other than say directors loan account) then you can then go ahead and file the DS01.
It is up to you how long you leave it until you submit the DS01. I wouldn't worry too much about the £150 accounts late filing penalty, as once the DS01 is filed all such penalties are voided.
EDIT - Paul Scholes beat me to it!
What happened to the office equipment?
If the company has no assets, what happened to the office equipment etc purchased with the grant money?
Are you sure...
... that the grant is not taxable? You say you withdrew the remaining expense money. This may result in an overdrawn directors loan which would also be a taxable event.
You may want to check the terms of the grants
The grant providers may want notice of the winding up of the company and could even require repayment of all or part of the grant. If this is the case they will dispute the dissoltion of the company, and if the company has net liabilities, it could be deemed tarding whilst insolvent. If this is the case the directors will be responsible for any debts of the company. Also, if the grant providers require accounts to be filed, you will need these sorted ASAP.
As stated above, if accounts are never filed, Companies House do not actually issue a fine, as they only issue it when the accounts are actually filed, as the fine is time dependent.
Good luck.
loose ends
I'd send in the DS01 at the same time, it takes a minmum of 3 months to action plus, if worse comes to the worse and you wanted to delay it, there's another form you can send to withdraw it.
Unless the directors have done anything dodgy then the fines etc are all the company's.
The PAYE thing is a pain. Even if you don't take a salary, if you draw expenses that are not covered by a dispensation (excused from declaring them) then they are reportable on a year end P11D, under your PAYE regsitration. This may be what HMRC is talking about.
So your accountant may still need to fill these out & submit them for the company then ask HMRC to close the scheme as the company is being struck off. But this can all be done in the 3 month period