Closing down LTD via voluntary strike-off

Need help to make sure I don't mess up with all the steps while closing down LTD.

Didn't find your answer?

Hello,  hope you're doing well.

Unforunately we parted way with my accountant since they wanted to overcharge me for closing down the LTD (I was paying £150 for what I thought is a full service, and when I wanted to close my LTD they wanted to charge £650 + VAT extra).

Anyway, my accounts are quite straightforward and I have everything available through FreeAgent so thought I can probably do it myself. I have all aligned up but wanted to double check with you that I didn't miss anything. (I did call a few accountants for free initial consultation, but so many bad advices were there, including like tax evasion, or that I can close bank account 9 months after strike off which is completely wrong).

Much appreciated everyone :)

Given:

1. LTD company, AP runs from 1st of November to 31st of October. Accounts and CT600 was filed for 2022-2023 year already. 2 shareholders, 60/40, 1 employee (me, PAYE).

2. Left assets after paying CT ~ 40k. From which 30k will be distributed as dividends before ceasing trading.

Is my understanding and plan correct if I want to cease trading on 31st of May?

1. Get latest invoice paid on 25 of May.

2. On 26th of May, distribute the dividends , leaving money in the company for the last CT600.

3. Deregister for PAYE (through free agent), pay any NI etc. that was due.

4. Shorten the accounting period to run from 1st November to 31st of May.

5. Prepare and file CT600 for 1st of November to 31st May (through free agent). Then call/write to HMRC to tell them that will be the last CT600 since ceased trading.

6. Pay the CT tax for the last CT600 (say in June).

7. Distribute the remaining funds to shareholders (60/40) proportion and that'll be CGT.

8. On 1st of September (3 months until ceased trading), file DS01, notify shareholds, board meetings etc.

9. Just wait, check gazzette / objections to strike off etc.

 

Questions:

- Am I missing something?

- Am I right that I don't have to file final accounts to CH?

- What happens if I need to pay for freeagent/registerd office address etc. from company bank account in June/July, how do I move that loss to the CT600 that was already filed until end of May?

 

 

 

 

 

 

 

Replies (46)

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Tornado
By Tornado
01st May 2024 09:54

You require Professional Advice!

Thanks (7)
Replying to Tornado:
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By yataj
01st May 2024 12:44

Tornado wrote:

You require Professional Advice!

Thank you! Two accountants I called (professionals) said:
- You can just apply for strike off now, no need to file accounts or pay tax.
- Isn't that illegal?
- Yeah it's not the right way to do it but everyone does it.

Another professional I called:
- What do I do with the bank account?
- So after the strike off your bank account will stay open up to 9 months so you can withdraw funds.

Can you tell please where exactly do I find these professionals?

Thanks (0)
Replying to yataj:
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By rmillaree
01st May 2024 12:55

you can ask people here to pm you with quotes - people here tend to be quite diligent

Thanks (1)
Replying to yataj:
Tornado
By Tornado
01st May 2024 13:02

Qualified Accountants (and others that have Professional Indemnity Insurance) are not permitted to provide advice unless you are formally engaged as a client. The 'advice' you obtained was probably just suggestions for you to check out yourself or was given to you by people who were not qualified or had no Professional Indemnity Insurance.

Such advice that you received, possibly from a cold call to an Accountant, would not have been based on any background knowledge of your particular situation or intended to be definitive.

When I say you need need professional advice, I mean paid for advice from a suitably qualified person.

Thanks (2)
Replying to Tornado:
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By yataj
01st May 2024 13:11

Tornado wrote:

Qualified Accountants (and others that have Professional Indemnity Insurance) are not permitted to provide advice unless you are formally engaged as a client. The 'advice' you obtained was probably just suggestions for you to check out yourself or was given to you by people who were not qualified or had no Professional Indemnity Insurance.

Such advice that you received, possibly from a cold call to an Accountant, would not have been based on any background knowledge of your particular situation or intended to be definitive.

When I say you need need professional advice, I mean paid for advice from a suitably qualified person.

Got it, thanks for explaining it (and not being judgmental and mocking me like others in the threads..). Can you provide a quote please for the advice?

Thanks (0)
Replying to yataj:
By JCresswellTax
01st May 2024 13:25

Do you honestly think anyone on here would be interested in taking you on as a client with your 'know it all' attitude which clearly shows no value in accountants? No chance!

Thanks (2)
By ireallyshouldknowthisbut
01st May 2024 10:01

"Anyway, my accounts are quite straightforward and I have everything available through FreeAgent so thought I can probably do it myself"

You also do your own dentistry, right?

Hmmm. £650 eh. Absoutely rob dog. Id be minium £1k for taking you on setting up all my files, trying to sort out the mess and then this being it for our entire engagement.

You massively underestimate how complex this stuff is to do right. But your funeral and excess tax bill.

Thanks (5)
Replying to ireallyshouldknowthisbut:
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By yataj
01st May 2024 10:28

ireallyshouldknowthisbut wrote:

"Anyway, my accounts are quite straightforward and I have everything available through FreeAgent so thought I can probably do it myself"

You also do your own dentistry, right?

Hmmm. £650 eh. Absoutely rob dog. Id be minium £1k for taking you on setting up all my files, trying to sort out the mess and then this being it for our entire engagement.

You massively underestimate how complex this stuff is to do right. But your funeral and excess tax bill.

You kidding right? Tell me my accountant who I was paying 150 pm was just pulling the data out of freeagent to fill in all the fields? including automatic payroll. And yes, 650 + VAT is a lot, I found way cheaper (like less than 200 quotes online).

Thanks (0)
Replying to yataj:
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By Yossarian
01st May 2024 10:50

yataj wrote:

ireallyshouldknowthisbut wrote:

"Anyway, my accounts are quite straightforward and I have everything available through FreeAgent so thought I can probably do it myself"

You also do your own dentistry, right?

Hmmm. £650 eh. Absoutely rob dog. Id be minium £1k for taking you on setting up all my files, trying to sort out the mess and then this being it for our entire engagement.

You massively underestimate how complex this stuff is to do right. But your funeral and excess tax bill.

You kidding right? Tell me my accountant who I was paying 150 pm was just pulling the data out of freeagent to fill in all the fields? including automatic payroll. And yes, 650 + VAT is a lot, I found way cheaper (like less than 200 quotes online).

If you found people willing to do it for less than £200, then why not go to them?

Thanks (5)
Replying to Yossarian:
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By Paul Crowley
01st May 2024 11:07

That is exactly what I thought.
But then online offers tend to increase in price when people try to take them up.

Thanks (0)
Replying to yataj:
By ireallyshouldknowthisbut
01st May 2024 11:02

yataj wrote:

ireallyshouldknowthisbut wrote:

"Anyway, my accounts are quite straightforward and I have everything available through FreeAgent so thought I can probably do it myself"

You also do your own dentistry, right?

Hmmm. £650 eh. Absoutely rob dog. Id be minium £1k for taking you on setting up all my files, trying to sort out the mess and then this being it for our entire engagement.

You massively underestimate how complex this stuff is to do right. But your funeral and excess tax bill.

You kidding right? Tell me my accountant who I was paying 150 pm was just pulling the data out of freeagent to fill in all the fields? including automatic payroll. And yes, 650 + VAT is a lot, I found way cheaper (like less than 200 quotes online).

Sounds like you didnt hire an accountant, you hired one of those big "data crunch" outfits who sub it all out, no one remotely qualified or knowing what they are doing. I can understand that following such an expericen you may not value what a proper accountant will do, as you havent had one yet. However now going for a "cheap is best" option is really just doubling down on getting poor advice and outcomes.

Thanks (3)
Replying to yataj:
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By Leywood
01st May 2024 12:25

Are you kidding?!

You clearly have no judgement.

Plus no clue about what you are doing.

I would charge you more for being a PITA client.

If its that easy, then get on with it and stop asking Accountants on here for free advice.

Thanks (0)
Replying to yataj:
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By bernard michael
02nd May 2024 09:34

yataj wrote:

ireallyshouldknowthisbut wrote:

"Anyway, my accounts are quite straightforward and I have everything available through FreeAgent so thought I can probably do it myself"

You also do your own dentistry, right?

Hmmm. £650 eh. Absoutely rob dog. Id be minium £1k for taking you on setting up all my files, trying to sort out the mess and then this being it for our entire engagement.

You massively underestimate how complex this stuff is to do right. But your funeral and excess tax bill.

You kidding right? Tell me my accountant who I was paying 150 pm was just pulling the data out of freeagent to fill in all the fields? including automatic payroll. And yes, 650 + VAT is a lot, I found way cheaper (like less than 200 quotes online).


I suggest you accept one or pop in and ask the MDTP
Thanks (0)
By JCresswellTax
01st May 2024 10:14

You do realise (you don't realise, surely) you are asking for free advice on a forum that is designed for professional accountants. We have spent time learning how to do exactly what you want to do and you expect us just to pass this information to you for free? Hahaha

Also, an additional fee for closing down the company is fair as there is additional work involved over and above the normal year-end work.

Think you made a bad call leaving them...

Thanks (7)
Replying to JCresswellTax:
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By yataj
01st May 2024 10:26

Well I just asked a question, if you think this is wrong..

>Also, an additional fee for closing down the company is fair as there is additional work involved over and above the normal year-end work.

I mean, to be fair it's just a few clicks on free agent to generate the tax return and then fill in a DS01 form which is just a signature. It's far far from rocket science.

Thanks (0)
Replying to yataj:
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By David Ex
01st May 2024 10:40

yataj wrote:

I mean, to be fair it's just a few clicks on free agent to generate the tax return and then fill in a DS01 form which is just a signature. It's far far from rocket science.

You should consider a career in accountancy if you think it’s so easy.

Thanks (7)
Replying to David Ex:
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By yataj
01st May 2024 10:48

David Ex wrote:

yataj wrote:

I mean, to be fair it's just a few clicks on free agent to generate the tax return and then fill in a DS01 form which is just a signature. It's far far from rocket science.

You should consider a career in accountancy if you think it’s so easy.

Maybe I will. I do understand that there's so much more in accountancy, but for my particular circumstances which I outlined in the post, that should be it. Please tell me I'm wrong and I'm missing a lot of steps and I have no idea what I'm doing?

Thanks (0)
Replying to yataj:
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By David Ex
01st May 2024 11:15

yataj wrote:

Maybe I will. I do understand that there's so much more in accountancy, but for my particular circumstances which I outlined in the post, that should be it. Please tell me I'm wrong and I'm missing a lot of steps and I have no idea what I'm doing?

You’re wrong, you’re missing a lot of steps and you have no idea what you’re doing. Hope that helps.

Thanks (10)
Replying to David Ex:
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By yataj
01st May 2024 11:21

David Ex wrote:

yataj wrote:

Maybe I will. I do understand that there's so much more in accountancy, but for my particular circumstances which I outlined in the post, that should be it. Please tell me I'm wrong and I'm missing a lot of steps and I have no idea what I'm doing?

You’re wrong, you’re missing a lot of steps and you have no idea what you’re doing. Hope that helps.

Please tell me one single step I missed

Thanks (0)
Replying to yataj:
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By Leywood
01st May 2024 12:28

Only if you pay my fee

Thanks (1)
Replying to yataj:
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By Leywood
01st May 2024 12:26

You’re wrong, you’re missing a lot of steps and you have no idea what you’re doing. Hope that helps

Thanks (1)
Replying to yataj:
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By Tom+Cross
01st May 2024 10:49

"I mean, to be fair it's just a few clicks on free agent to generate the tax return and then fill in a DS01 form which is just a signature. It's far far from rocket science."

Just light the blue touch paper, and stand well back. On the rocket, I meant.

Thanks (0)
Replying to JCresswellTax:
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By yataj
01st May 2024 10:30

JCresswellTax wrote:

You do realise (you don't realise, surely) you are asking for free advice on a forum that is designed for professional accountants. We have spent time learning how to do exactly what you want to do and you expect us just to pass this information to you for free? Hahaha

also, I mean, it's understandable, but I was just genuinely looking for an advice. I don't know if the accountants are like that but when you go and ask a question to any other profession (say StackOverflow, for WebMD) they don't tell you: "Hey, I spend all that time learning and you want the info for free". I mean, defeats the whole purpose of this forum IMHO. But alright then, keep your secrets

Thanks (0)
Replying to yataj:
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By David Ex
01st May 2024 10:48

yataj wrote:

I mean, defeats the whole purpose of this forum IMHO. But alright then, keep your secrets

Well if you’d like to summarise your contributions to this forum (or indeed any other forum), I think we’d all be interested to read.

Tell us what you do and how best we can can contact you for freebies.

Thanks (0)
Replying to yataj:
By JCresswellTax
01st May 2024 10:53

Go and ask them then?

This forum is not designed for freeloaders, it is designed for accountants to bounce ideas off each other and seek assistance with technical matters.

Thanks (5)
Lisa Thomas
By Lisa Thomas - Insolvency Practitioner
01st May 2024 10:40

Have you considered washing the company through a solvent Members Voluntary Liquidation and claiming tax relief on the dividends?

Might be worth exploring. Are your personal accountants the same firm that dealt with the company, or someone else?

Thanks (0)
Replying to Insolvency Practitioner:
By Ruddles
01st May 2024 10:47

Insolvency Practitioner wrote:
claiming tax relief on the dividends?

???

Thanks (2)
Replying to Ruddles:
Lisa Thomas
By Lisa Thomas - Insolvency Practitioner
01st May 2024 10:54

Simpler than saying distributions and going in to detail on BADR...

Thanks (0)
Replying to Insolvency Practitioner:
By Ruddles
01st May 2024 11:04

Simpler, but highly misleading to the uninformed

Thanks (3)
Replying to Ruddles:
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By Paul Crowley
01st May 2024 11:11

+1
Better to refer to the tax rates

Thanks (0)
Replying to Insolvency Practitioner:
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By rmillaree
01st May 2024 11:24

dont get you?

are you saying tax relief on dividends can be claimed ?

is rate of tax on dividends not lower than rate of capital gains tax if people treat funds as capital if they are basic rate taxpayers?

what is a liquidator likely to charge ?

can this not create anto phoenix issues ?

ie does what you are suggesting bring anything to the table an example calc would be useful (factoring in liquidator fees) if it does !

Thanks (0)
Replying to rmillaree:
Lisa Thomas
By Lisa Thomas - Insolvency Practitioner
01st May 2024 11:40

Have a look here:
https://youtu.be/svRwgIsFWR8?si=au4l71QrrhIRwKgj

The links for more information about Business Assets Disposal Relief (BADR) is in the description. Your personal accountant should give you advice on this.

Yes there is anti phoenixing legislation known as TAAR which currently has a 2 year window. More info here: https://www.gov.uk/hmrc-internal-manuals/company-taxation-manual/ctm36305

Costs will probably be c£3k plus VAT and expenses. The VAT can usually be recovered if the company is VAT registered. Often the tax savings outweigh the costs.

Thanks (0)
Replying to Insolvency Practitioner:
paddle steamer
By DJKL
01st May 2024 14:55

Depends on other income they have re taking the dividend route and we are not told what the marginal tax rates of the shareholders are, wind up generally only works re BADR if higher rate taxpayer

Thanks (1)
Tornado
By Tornado
01st May 2024 10:42

The Companies Act 2006 is 700 pages long, has 1300 sections and the Contents Listing alone runs to 59 pages.

If you are sure that you can confidently deal properly with all the matters relevant to your situation, (with a few clicks in Free Agent and without professional advice), then I wish you the best of luck, you will need it.

Thanks (1)
Replying to Tornado:
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By yataj
01st May 2024 10:47

Tornado wrote:

The Companies Act 2006 is 700 pages long, has 1300 sections and the Contents Listing alone runs to 59 pages.

If you are sure that you can confidently deal properly with all the matters relevant to your situation, (with a few clicks in Free Agent and without professional advice), then I wish you the best of luck, you will need it.

There's no assets, no VAT, only one director on PAYE. The sales and expenses are all recorded. Company is solvent and can pay all the debts to HMRC.

Thanks (0)
Replying to yataj:
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By Tom+Cross
01st May 2024 10:52

"There's no assets, no VAT, only one director on PAYE. The sales and expenses are all recorded. Company is solvent and can pay all the debts to HMRC."

From the sounds of it, you have everything in place, to make a complete dogs breakfast of it all. My advice; press on. You shouldn't even need a professional forum.

Thanks (2)
Replying to yataj:
paddle steamer
By DJKL
01st May 2024 14:57

What is it using to pay its HMRC debt, a bank balance, is that not an asset?

Thanks (0)
DougScott
By Dougscott
01st May 2024 11:47

If you can "do it yourself" Yataj then go away and do it yourself.

Thanks (3)
Replying to Dougscott:
By JCresswellTax
01st May 2024 12:09

Amazing :)

Thanks (0)
Replying to JCresswellTax:
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By FactChecker
01st May 2024 12:21

OP's previous post: "I'm trying to help a client of mine to tax plan his move from UK"

So we can all stop worrying ... OP is well versed in every aspect of international tax issues and will undoubtedly manage this particular simple task without trauma.

Only surprise was wasting their valuable time in 'sharing' their plan with us?

Thanks (6)
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By Martin B
01st May 2024 11:51

Are you free this saturday morning to come and do my gardening ? Bring your tools with you. I want a professional job done.

Thanks (1)
Replying to Martin B:
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By David Ex
01st May 2024 12:09

Martin B wrote:

Are you free this saturday morning to come and do my gardening ? Bring your tools with you. I want a professional job done.

No, he’s wallpapering my front room then.

Thanks (3)
Replying to David Ex:
the sea otter
By memyself-eye
01st May 2024 15:14

Damn, I thought he was servicing my car (the Bentley)

Thanks (1)
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By pierschester
02nd May 2024 11:59

Sorry to hear about your bad experience, but honestly, if you want to do it yourself, at least get some paid advice so you don't do anything illegal. It's not complex per se (the procedure), the main complexity arrives if something goes wrong or it's unplanned for, in which case things can go bad really quickly.

Other that.

1. You should be careful with CGT distribution since it may be considered as income too (in anticipation of dissolution). In which case if you're higher rate tax payer that could mean extra 33% tax on 10k.

2. Don't forget the board meeting and minutes (which clearly states this is dividend in anticipation for dissolution, all signed, print it on paper).

3. You won't be able to prepare CT600 through FreeAgent for the shortened year because FreeAgent doesn't support that. You'll have to do it manually, but you can generate the figures from FreeAgent.

4. You don't need to submit the final accounts to CH. But you DO need to submit the final accounts to HMRC (with your CT600).

5. You can either pay from your personal bank account for FreeAgent and other things, or you can put it into your CT600 (for future reference)

Thanks (1)
Replying to pierschester:
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By pierschester
02nd May 2024 12:31

I can advise you privately on that if you'd like. DM me.

Thanks (0)
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By kim.shaw-and-co.com
03rd May 2024 01:08

yataj wrote:

7. Distribute the remaining funds to shareholders (60/40) proportion and that'll be CGT.

... and would that be more or less than £25,000 of distributions in total, bearing in mind the provisions of s1030A of CTA 2010 ?

Unaccrued post-cessation expenses are usually treated as capital costs of administration unless they were incurred wholly, necessarily and exclusively for the purposes of the former trade up to its cessation (in which case they should have been allowed for in the final tax accounts).

Doing the rounds of "free 1-hour consultations" offered in good faith by service providers to try to get off paying anyone for professional advice in respect of a process with many potential pitfalls and/or missed opportunities is likely not the best plan.

What looks straightforward on paper can fail on implementation, particularly in relation to the distributions and how they are treated ... when that personal tax enquiry opens or a counteraction notice is received post-strike off, advisors who were paid next-to-nothing for helping with a couple of steps won't be sorting things out for you for £200 I can assure you !

Thanks (1)