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Company strike off process

Company strike off process

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Hello!

My understanding is that if you strike off a Ltd company that meets the threshold for a statutory audit within 9 months of the year end you are not required to carry out a stat audit. However was are the requirements you do have to meet? Do you have to prepare FS for the prior financial year? Who do you file them with etc. Thank you 

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By SXGuy
25th Jan 2020 07:06

If the strike off has been accepted you file accounts with the tax return to hmrc upto the date of strike off.

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By Wanderer
25th Jan 2020 07:26

SXGuy wrote:

If the strike off has been accepted you file accounts with the tax return to hmrc upto the date of strike off.

So you file accounts after the company has 'died'??
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By SXGuy
25th Jan 2020 16:38

I don't know what your trying to get at but if you've applied for strike off then presumably you have also done the accounts upto that date.

Otherwise you could also argue, how can the company apply for strike off after its "died"

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By SXGuy
25th Jan 2020 16:38

I don't know what your trying to get at but if you've applied for strike off then presumably you have also done the accounts upto that date.

Otherwise you could also argue, how can the company apply for strike off after its "died"

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By lionofludesch
25th Jan 2020 09:47

What happens if you don't ?

There's no-one to pay any penalty.

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By SXGuy
25th Jan 2020 16:39

No idea, never been in that situation.

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By lionofludesch
25th Jan 2020 16:52

You can't apply for strike-off until at least three months have expired since ceasing to trade. With all due respect to SXGuy, there's rarely a need to file accounts or a return to the date of strike off. It's never happened to any of my client companies.

Ceasing to trade ends a chargeable accounting period, so effectively, you have (at least) three months to agree your corporation tax liabilities with HMRC. More if you need it - simply by delaying your application.

It's possible that there could be some sales of assets leading to further CT liabilities but this would be unusual.

I would always recommend agreeing the tax liabilities first if only to prevent HMRC objecting to the strike off - although, in reality, they're rarely wick enougb to notice.

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By qwertyqwerty05
25th Jan 2020 19:54

Concern is the audit timing/process- if you can strike off then no audit but if you can’t you need an audit. Concerned you can’t strike off and then playing catch up

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By lionofludesch
25th Jan 2020 20:10

qwertyqwerty05 wrote:

Concern is the audit timing/process- if you can strike off then no audit but if you can’t you need an audit. Concerned you can’t strike off and then playing catch up

Why are you filing accounts at comp house after applying for strike off? They don't want any.

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By qwertyqwerty05
26th Jan 2020 09:04

Plan to cease trading 01 July (sell business assets).The 3 mths strike off window would take us to 1 Oct after the filing deadline, therefore we will require FS with an audit report?

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By lionofludesch
26th Jan 2020 10:17

Your question is so much more intelligible with dates.

Selling off the trading assets isn't necessarily part of the trade. Take care there.

If you file accounts at Companies House and the company exceeds the audit threshold, you need an audit. The question is - do you need to file accounts ? I would suggest maybe not.

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By qwertyqwerty05
30th Jan 2020 23:36

Update on this, I understand if I apply for a strike off before 30 Sept companies house will not expect FS files nor a audit report relating to the prior Financial year. Good news. However, HMRC requires accounts filed and tax return paid before strike off can happen. For the account filed would HMRC expect an audit report, if companies house does not? Thank you

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By lionofludesch
31st Jan 2020 05:32

qwertyqwerty05 wrote:
However, HMRC requires accounts filed and tax return paid before strike off can happen. For the account filed would HMRC expect an audit report, if companies house does not? Thank you

No. CT600 is filed under Finance Act rules. Audit reports are Companies Act rules. There's no problem here except the one in your head.

Just a thought, though. Did you not say the company was going to trade until 1 July?

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By whitevanman
31st Jan 2020 10:22

The company is required to file (as part of its return) the accounts which it is required by the CA to prepare (see for example the guidance at CTM93180). I don't think it matters whether CH have given some concession. It is the CA requirements that matter.

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By lionofludesch
31st Jan 2020 11:26

whitevanman wrote:

The company is required to file (as part of its return) the accounts which it is required by the CA to prepare (see for example the guidance at CTM93180). I don't think it matters whether CH have given some concession. It is the CA requirements that matter.

In 47 years in accountancy, I have NEVER filed full company accounts with all the notes, whether or not audited, to settle a company's final corporation tax liabilities prior to a striking off. Forgive me if I disagree with your interpretation.

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By whitevanman
31st Jan 2020 20:04

Sorry but it is not my interpretation, it is what the legislation says and what the HMRC guidance says they expect. The fact that, in practice, something less may be accepted is not really the point but, if replying to a question such as this, it would be better to say what the legislation requires and what you find happens in practice. That way the OP has the relevant information and can make an informed decision.

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By lionofludesch
31st Jan 2020 20:26

So you're saying that HMRC is entitled to whatever Companies House is entitled to. So if there's no requirement to file at Companies House, HMRC get nothing.

Sounds good to me.

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Replying to lionofludesch:
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By whitevanman
31st Jan 2020 21:41

I suggest you re-read my original post. The requirement is based on the Companies Act not Companies House.

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By lionofludesch
31st Jan 2020 23:36

I'm uncomfortable with the concept of performing and charging for unnecessary work like some cowboy dentist. But feel free to advise your own clients as you wish.

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By qwertyqwerty05
31st Jan 2020 07:23

Thank you. Good news. Would HMRC expect accounts and tax return for prior yr (2019) and YTD 2020 before strike off? Effectively the 2020 return would be ~17 months before standard deadline?
Yes re 01 July but companies house explained they do not ask for a last trading date and the 3 mth window is a timeframe that expect a company to need to be ready for strike off.

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By lionofludesch
31st Jan 2020 09:14

qwertyqwerty05 wrote:

Thank you. Good news. Would HMRC expect accounts and tax return for prior yr (2019) and YTD 2020 before strike off? Effectively the 2020 return would be ~17 months before standard deadline?
Yes re 01 July but companies house explained they do not ask for a last trading date and the 3 mth window is a timeframe that expect a company to need to be ready for strike off.

Well, no, the final return would be five months. You can't have a 17 month return. You can prepare 17 month accounts though.

Why don't you say plainly what periods are being covered ? I was thinking a December year end, based on filing by 30 September. Now you've come up with 17 months to 1 July, which suggests January.

Will the assets be sold after trading ceases ? Are there any losses to be relieved ?

Remember that ceasing to trade ends an accounting period.

https://www.gov.uk/corporation-tax-accounting-period

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By qwertyqwerty05
31st Jan 2020 10:03

Yes asset sold same day as final trading ceasing (01 July 20).
1) 2019 Dec YE - CT 'normally' due 2020 Dec
2) 2020 Dec YE - CT 'normally' due by 2021 Dec
My question was would the CT be due for both years and settled to HMRC before we can apply for strike off with CH? i.e effectively (1) 3/4 months early and (2) 17 mths early as we would be settling 2020 CT in 2020, mths before the 'normal' Dec 2021 deadline. Hope this clarifies - thanks

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By lionofludesch
31st Jan 2020 10:21

Well, technically 1 Jan 2019 to 1 July 2020 is over 18 months but I dare say we can overlook that.

You need returns for 12m to Dec 2019 and 6m to July 2020.

Do your accounts, do your returns, send them in early, pay the tax early.

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By qwertyqwerty05
31st Jan 2020 10:45

thank you

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