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Closing Limited Company

Closing Limited Company

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Hi,

I'm hoping for some advice on shutting down my ltd company.

The company had one employee (me) hasn't traded since December 2011 and the last accounts were posted recently on 30/04/2013.

I'm currently in permanent work and not taking a salary from the company.

The last corporation tax payment for 2011/2012 was made in January and all VAT, PAYE has been settled.

There's only about £3.5K left in the business, and I hoped it would be fairly straightforward (and cheap) to shut down.

From what I can see a DS01 form would need filled in, bank and HMRC informed, and a final set of accounts made up.

I'm assuming the final set wouldn't be hugely different from what was submitted a few weeks ago.

However my accountant feels that £500+vat is the cost to do this. 

Any advice appreciated, I'm considering getting quotes from some local accountants, am I likely to get a better deal, or is £600 what I'd really expect to pay?

Thanks

Phil

Replies (9)

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By 1 2
23rd May 2013 16:25

£500+VAT doesn't on the

£500+VAT doesn't on the surface sound a huge amount to prepare a set of accounts & CT return, submit, and hold your hand over the DS01 submission etc.

However, if the company hasn't traded at all since the last submitted accounts and you feel the fee is steep, you could probably DIY.  File a set of dormant accounts online from your login here then complete the DS01 which is very straight forward.

Do ensure you clean out the company bank account before the company is struck off, otherwise you'll lose the funds in it.  On the basis you take the funds out as part of the close down and they're clearly <£25k, they should qualify for CGT treatment, meaning if you haven't made any other capital disposals in the tax year no personal tax for you on the £3.5k.

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Replying to Kent accountant:
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By phil23
23rd May 2013 16:39

Thanks for the reply,I think I'm just wondering what justifies that amount.

I pay the accountant a monthly fee (even while the company hasn't traded), the CT return will be nil, the accounts should be pretty much the same as what was just filed (so the work has already been done), and it's a phone call/letter to bank and HMRC. That leaves submitting a DS01 (which looks easy enough) and paying £10.

I considered around £300 to be fair enough, double that makes the DIY route attractive. My issue would be knowing what to put in the accounts (other than copy the recent return) and how to inform HMRC that I'd be taking the balance through CGT (or would that wait until my self-assessment).

It just feels at bit much when I've been paying the accountant monthly for many years and have even got them new clients through recommendations.

 

Phil

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By dreamcatcher
23rd May 2013 16:40

Agree

Without further information £600 to wind up a company doesn't seem unreasonable to me. 

Providing you are careful you can do this yourself, but using an accountant will give you pease of mind that anything has been done and more importantly in the correct order.

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By 1 2
23rd May 2013 16:51

If you've continued to pay the accountant over the last year, then my thoughts would be that would be for the preparation of final accounts & CT return...and I personally feel it'd then be a bit cheeky to ask for further money to help with filling in the DS01 form (seriously, have a look at it...it basically asks for the company name and your signature, not much else!)

My 2c would be that you've already paid them to do 90% of what you're now asking them to do.  Unfortunately though if they disagree and you decide to look elsewhere, the fact that you've made all those monthly payments to one accountant wouldn't mean a potential new accountant would do the work for free.

I'd go back to them and say you expect them to do final returns for no extra charge as you've already paid via the monthly fees.  If they won't help with the DS01 then DIY that no problems.

Before you go in guns blazing, might be worth double checking what your monthly fee is supposedly for (eg possibly it's paying in arrears for last years work, rather than in advance for this years).

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Replying to taxfellow:
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By phil23
23rd May 2013 18:21

Thanks for the reply, I've paid a monthly fee from the day the company was incorporated, so I'd say I was paying in advance :)

I though £300 fair as one accountancy firm's web site states

"As an alternative to the company being fully closed down, it can remain ‘dormant’ on the register. Leaving the company dormant typically costs less than £100 per year, and it means that it can be used again, for any other purpose, without any delay or set-up cost. It also serves to reserve the company name for future use, and an older company has slightly more financial credibility than one that has just been incorporated. If the company is not going to be used for at least 3 years, then it is usually more cost effective to close it down, and then incorporate another company if one is needed."

The 100/year and 3 years, led me to believe £300 was a reasonable amount.

 

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By Mouse007
23rd May 2013 18:46

why do accounts?

Just submit the application to strike off - no further accounts will be required.

Write to HMRC (corporation tax) tell them company not traded since 2011 and you have applied to have it struck off. Otherwise they may object.

Deregister for VAT

Tell PAYE bods to close PAYE scheme, if it is still open.

Close bank account and sit back and wait.

£600 indeed !

 

 

 

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By phil23
24th May 2013 15:35

Last question

One last question - when the company is shut down, I'm assuming I'll have to declare any dividends/capital distribution through my self-assessment. Is that correct? Or are there other forms that need filling?

 

Phil

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Replying to Tax Dragon:
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By Carl London
25th May 2013 00:49

not needed...

phil23 wrote:

One last question - when the company is shut down, I'm assuming I'll have to declare any dividends/capital distribution through my self-assessment. Is that correct? Or are there other forms that need filling?

 

Phil

capital distribution will be below your annual exemption limit so won't appear on your tax return.
I agree with the above - dont bother with accounts if you have not traded!

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By ds
23rd Aug 2013 09:42

One last bite of the cake ....

Well you can't blame him for trying to get one more big hit before you say goodbye. Seems the DIY route is far cheaper than £600 !  He has quite a brass neck to be polished.

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