Accountancy fees for Voluntary strike-off

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Hi All,

Looking for advice in voluntarily striking off my company. My company hasn't been trading for coming up to 3 years now. There is under £25k remaining in the company, with no remaining financial or legal obligations, no creditors or loans. The only payments leaving the company account are the monthly bank account fee, and the monthly accountancy fee (£75). I left the company running just in case I wanted to return to contracting or do some side-work, which has never happened so it's time to close it.

I've been in touch with my accountant (online firm), asking for advice on the most efficient method in closing the company, and frankly I've had a very poor response from them considering I've been paying them £75 a month for very little work over the last 3 years. I was told very vaguely I could either withdraw the money as dividend and that's it. I have no idea of the tax implications of either, barring some google searches which is quite possbily giving me some mis-information, hence my journey to this forum.

To top it off, their vague response was encapsulated with a demand for £1k+VAT for final company accounts and to strike the company off, which seems excessively high given the circumstances. I don't expect them to work for free, and I'm guessing this is their "standard" charge for the service, but considering they've been getting paid for very little for 3 years it's more than a bit galling.

So, my questions... does this seem like a fair charge? As an accounting lay-person  I honestly have no clue how much work would be required on their behalf to close the company, but given the scenario it seems pretty straightforward?

Secondly, what would be the most tax-efficient way to withdraw the remaining funds? There's about £23k left in the pot and I'm an employed higher rate tax earner (if that makes a difference?). Should I withdraw £1k dividend to hit my allownace, then withdraw the rest as capital, once all accounts are settled? Or should I withdraw £1k now, then wait until April comes, withdraw a further £500 dividend, then close the company in the new tax year instead?

Any help most appreciated!

Replies (10)

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By Truthsayer
22nd Feb 2024 08:47

It needs someone to review all the circumstances. It is probably not worth getting a new accountant now, as they might well ask for a similar fee due to you being a new client, which necessitates a lot of extra work. In your shoes, I would just pay the fee and tell the existing accountant to deal with it.

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By Cylhia66
22nd Feb 2024 09:03

What was your motivation for chosing this online accountant's firm in the first place? Is my guess correct if I say, "they were cheap"? Sounds like you need to stick to your guns now...

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By Leywood
22nd Feb 2024 09:09

If you are not happy phone them back and complain.

Or pay for a second opinion.

This isn’t a forum for getting such advice for free.

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By I'msorryIhaven'taclue
22nd Feb 2024 09:18

So you've hired a bargain-basement accountant but don't care much for the bargain-basement advice; and you'd like the panel here to solve your issues pro bono.

Here's the solution: either you chew on the McAdvice offered by your present accountant; or change to an accountant who offers waiter service and a knife and fork. Bon Appetit!

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By Highgate
22nd Feb 2024 09:37

If you pay peanuts, you get monkeys.

These things require consideration, which requires recompense. And £1k for a set of Ltd Co accounts & liquidation is really not a lot unless you have 20-odd transactions a year.

You may be able to get it cheaper elsewhere, but given the AML/ID/onboarding faff we must undertake, I’d be budgeting £250 just for that, so £750 for the accounts plus tax advice on liquidation is low-ball.

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By Paul Crowley
22nd Feb 2024 16:31

On line firms tend to be lacking in good advice.

Call a local accountant and he will go through the options.

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By DKB-Sheffield
22nd Feb 2024 17:18

Serious question...

WHO in the online firm have you spoken to? Depending on the firm, the staff answering calls are rarely more than bookkeepers/ trainees! Call them back and ask to speak to a tax adviser, and be willing to pay extra for the advice (see below).

Of the online firms I've looked at... partly through discussions on here... you'll find a lot of them (most) include limited basic tax advice in their fee. You are after strategic, and bespoke, advice that they clearly charge for. Most trades and professionals adopt a similar policy - my plumber won't service my boiler for free if I have paid to fix a leaking tap, I can't get a free website from a designer if I pay them for hosting, and I can't have a free tooth filling if I pay for a checkup. Let's face it, the tax you could save by closing the company efficiently will likely exceed their fee.

As others have said, if you don't like the advice/ service... move elsewhere. But, the idea any accountant (online or otherwise) should advise on, and close your company for nowt... because you pay an (unrelated and basic) annual accounts service subscription...? You wouldn't expect that service from your mechanic, so why from your accountant?

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By johnthegood
23rd Feb 2024 07:15

I have to disagree with my some of my above esteemed colleagues, I can only comment on what we would do if your were our client.

You have been paying almost 1k a year for what sounds like a non trading company with hardly any transactions, by anyones standards thats not cheap given the work involved.

All you need now is hand holding and advice while you strike off the company which again is very standard end of life stuff that any experienced accountant can do very quickly, if you had been our loyal client we would have done that for no further charge.

As a firm we always look at the "whole of life" of a client rather than what we can charge for an individual year or service.

I do agree though, to hire a new accountant just for this is going to be painful.

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By JCresswellTax
23rd Feb 2024 10:29

Bit harsh here guys.

We moan at posters with no accountant. This guy has one (albeit it sounds like a bad one) and we are still giving stick?

Op - if you have paid £75 p/m for 12 months then thats £900 towards non-trading accounts and potential company tax return. That is a reasonable fee for an accountant. A further £1k to dissolve the company is high, especially if their advice is to take a dividend!

In terms of distributing the remaining funds, it will almost certainly be beneficial to do this via a capital distribution. You should consider if you qualify for business asset disposal relief or not.

It would also be beneficial to do this in the current tax year before the capital gains tax allowance reduces further in 2024/25.

Hope this helps.

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By Mr_awol
23rd Feb 2024 13:47

We dont know what the £75 per month covers, nor when the last accounts were prepared or which period(s) the £75s relate to (in advance, in arrears, half and half, etc).

Obviously the client doesn't either, and this is the problem with the wishy-washy stance taken by the subscription brigade. Obviously it's in their favour as they do like a bit of cake and eat it, but £1k for final accounts and strike off is steep.

My advice OP is speak to someone local, be up front about your requirements, and see if they come in cheaper. If youdd come to me It would depend on what accounts (if any) need doing from now. I might have told you it's better to pay the £1k, given you a suggestion of what to say to the old lot, or charged you significantly less. TBH it wouldnt be bargain basement even if little work is required as there is an element of cost to commencing to act and then immediately ceasing so a small premium is normally payable.

In future, if you need another accountant try and avoid those wanting monthly retainers, or if you really want to use one, at least get them to put in writing how the commencing and ceasing works in their practice. Leave it to chance and most will want the first year paid as there was no SO, but also the last year paid as there is no ongoing SO, and the bit in between is a often rather murky over when/if it gets paid for.

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