Dissolved Company

I need some advice on a company which is in the process of being dissolved.

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I have a new client who is currently changing from a Ltd Company to a sole trader.  They incorporated the company Sept 2018 and it will finally be dissolved in Dec 2019.  As on Companies House, the company status is showing as 'Active - Active proposal to strike off', will we have to complete their confirmation statement?  Also, I'm assuming we would need to complete a set of accounts for HMRC/Co's Hse.  They are supposed to be completed up to 30/9/19, could we extend that date to coincide with the dissolved date in December?

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By JDBENJAMIN
08th Oct 2019 13:31

'They incorporated the company Sept 2018 and it will finally be dissolved in Dec 2019.' Your question makes no sense. Start again.

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Replying to JDBENJAMIN:
RLI
By lionofludesch
08th Oct 2019 15:33

JDBENJAMIN wrote:

'They incorporated the company Sept 2018 and it will finally be dissolved in Dec 2019.' Your question makes no sense. Start again.

What's wrong with it ? They incorporated the company and, after a year, decided to close it down - for reasons we don't know (not that they're relevant).

What makes no sense to you ?

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Replying to JDBENJAMIN:
Psycho
By Wilson Philips
08th Oct 2019 15:54

Why does that make no sense? Yes, it could be wrong but it could also be quite correct - eg client set up company in Sep 2018 and has decided that it's not worth it and is therefore dissolving it.

EDIT - stopped typing for a phone call so missed Lion's contribution.

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By Trethi Teg
08th Oct 2019 13:37

Not sure you should be advising clients with your obvious lack of basic knoweldge.

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Replying to Trethi Teg:
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By Bob Loblaw
08th Oct 2019 15:09

Oh, do bore off you cretinous little imbecile. Regardless of the holes in OP's knowledge, this is supposed to be a place where professionals can ask each others questions without fear of righteous little dorks such as yourself trying to point score for no reason other than the fact you are, presumably, deeply unhappy with your lot in life.

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RLI
By lionofludesch
08th Oct 2019 13:52

HMRC will require accounts for whatever the period of trading was - if any.

Companies House won't require accounts at all.

Strictly you should submit a Confirmation Statement. However, Companies House will strike off the company if you don't - which is what you want.

If you're toey about it, submit. It'll cost £13 for peace of mind.

I would suggest you brush up on your training by taking one or more of the excellent seminars or webinars on offer. Knowledge of the dates for returns and accounts is absolutely crucial in dealing with the affairs of companies. An accounting period for Corporation Tax is not necessarily the same as a period of account for Companies House purposes.

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By DeathandTaxes222
08th Oct 2019 14:24

If you're signed up to PROOF, they'll send you an email to remind you to file your confirmation statement. All of the emails I 've seen contain this sentence:

"Please ignore this email if you have already delivered the confirmation statement or recently made an application for strike off."

I'm probably wrong, but that last bit suggests to me that if there's an active proposal to strike then you probably don't need to submit a confirmation statement.

But HMRC will want some numbers. Don't mess with them. Ever.

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Replying to DeathandTaxes222:
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By Matrix
08th Oct 2019 14:30

We receive email reminders but don’t believe our clients are signed up for proof. Although it stops them getting paper copies which say URGENT ACTION REQUIRED for some inexplicable reason.

I agree with the rest of your post. And Lion and Trethi. Oh and Benji.

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Oaklea
By Chris.Mann
08th Oct 2019 15:45

"For we brought nothing into the world, and we can take nothing out of it".

Our first two respondents would do well to show some humility, rather than the "holier than though" attitude, which seems to be repeated, time and time again, throughout this forum. Does nothing else float your boat, so to speak?

Much like Lion, I can't see what's wrong with how the question has been set and I agree with Lion, some further experience of limited liability entities wouldn't go amiss. We should encourage fellow members who have the guts to post in the open community.

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Replying to Chris.Mann:
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By Jo Wood
08th Oct 2019 17:12

Thank you for replying, and that goes for all of you. The reason I queried it isn't that I don't have the basic knowledge of tax returns, it is that they are a new client who is moving from another accounting practice and has been informed by them that they do not have to submit any accounts or anything as it is being dissolved. My original thought was the same as all of you, that HMRC is going to want returns submitting, however, you know when someone puts doubt in your mind, even though you know you are right .....

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Replying to Jo Wood:
RLI
By lionofludesch
08th Oct 2019 17:52

The company should settle its tax debts. As part of the striking off process, the directors are obliged to notify creditors that they intend to have the company struck from the register.

Have they done this ? (I'm guessing no)

Have they quantified how much they owe HMRC ? (I'm guessing no)

If not, it could come back to bite them on the backside later.

Which is where the problem lies ..........

Make sure you have a record that you've told them all this.

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Replying to Jo Wood:
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By Matrix
08th Oct 2019 18:32

How come the striking off process has been started? Is this through not filing confirmation statement?

I took on a new client who wanted to pack up and lived to regret it. Hope it works out ok.

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Replying to Jo Wood:
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By whitevanman
08th Oct 2019 19:16

The fact you mention moving to a sole trade suggests there is a trading activity in the company. Transferring that may bring with it tax consequences.
If we assume for the moment that teading commenced in the company, on incorporation, HMRC would expect returns. They would accept a single set of accounts covering the entire period (but that needs to be registered with CH) and based on the above assumption, you would need to provide a return for the first 12 months and another for the final few months.
That said, the other agents may have been referring to what usually happens. HMRC systems assume the first return will cover 12 months from incorporation and that would usually fall due 12 months after that date. So, where dissolution takes place less than 2 years after incorporation, it will often all be over before it comes to the attention of HMRC. Yes they do get notice of an impending strike off, but they will only object if they have reason to believe there is some tax, potentially, due. Sometimes they have nothing to go on and so will not object and the company gets away with doing nothing. One should not of course assume that will apply and the company should submit returns etc as early as possible in order to have early finality (and certainty). Failure to do so could lead to problems for the individual when HMRC ask about activity prior to the sole trading and then pursue the individual for tax unpaid (I will say no more).

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Replying to whitevanman:
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By Matrix
08th Oct 2019 19:42

We haven’t been told anything about the trading.

Jo, please advise the dates of commencement and cessation of trade?

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Replying to Matrix:
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By whitevanman
08th Oct 2019 19:50

Please re-read my comments and those of the OP which say the client is "moving from a Company to a sole trader".
I agree it isn't accurate enough for a definitive reply (which is why I and no doubt others , didn't attempt one).
I have set out my assumptions simply to give an example of what might be needed.
As I see it, the OP knows what perhaps should happen but seeks reassurance because of conflicting advice from another firm of advisers. I also sought to say why that conflicting advice may have been given and why it might be dangerous to pursue that line.
With respect, the actual existence of a trade or dates etc will not impact the value of the answers given ( by me and others). The OP does not appear to need advice on those specifics (though may welcome it).

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By mrme89
08th Oct 2019 18:41

Did the company trade at all?

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