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Hi. Continue trading after cessation. Procedure?

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Previous accountants has submitted fanil accounts based on that the company goes to liqudation. However, Companies House wasn't notified as the client has change his mind and decided to continue trading. Accountant were notified on advance, but still submitted accounts as company goes to liqudation. What is the correct procedure in this case? There were 4K debit transaction on "capital distribution on cessation" in TB. No dividends.

Thank you on advance.

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By Paul Crowley
03rd Dec 2021 12:26

Find out what was done with HMRC on corporation tax and Self assessment
Start again and resubmit
Figure out what happened to the money
Words are all wrong
My guess, never was going to be a liquidation, just a DS01 attempt to get struck off
Liquidations cost money that was never paid to an insolvency practitioner

This really is not Finance assistant type work

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Replying to Paul Crowley:
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By Sasha11
03rd Dec 2021 14:21

Thank you for your reply. The liquidation has never happened in this case but final accounts has been submitted as it has. This is why it is confusing. Words I am using to explain the situation has been taken from TB and based on the conversation with previous accountants.

I am qualified licensed accountant (part timed). Apologies for the confusion.

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Replying to Sasha11:
RLI
By lionofludesch
03rd Dec 2021 14:32

Sasha11 wrote:

Thank you for your reply. The liquidation has never happened in this case but final accounts has been submitted as it has. This is why it is confusing.

If the company is still on the register and strike off is not in progress, then the company has ceased trading and restarted later.

Unusual, perhaps, but straightforward enough, surely ?

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Replying to lionofludesch:
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By Sasha11
03rd Dec 2021 14:45

"If the company is still on the register and strike off is not in progress, then the company has ceased trading and restarted later."

Agreed - that is how I understand it also. Very straight forward exactly. My question is why submitting this way accounts and what is the correct way to apply THIS to next financial year.

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Replying to Sasha11:
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By lionofludesch
03rd Dec 2021 15:01

Sasha11 wrote:

"If the company is still on the register and strike off is not in progress, then the company has ceased trading and restarted later."

Agreed - that is how I understand it also. Very straight forward exactly. My question is why submitting this way accounts and what is the correct way to apply THIS to next financial year.

Ah well, that depends whether we're talking Companies House or HMRC.

Companies House require you to prepare accounts to the company's ARD (give or take a week).

HMRC require you to make returns for periods determined by certain events. The events which spring to mind are ...

► Cessation of Trade
► Commencement of Trade
► Date to which accounts are produced

Each of these events signals the start or end of a Chargeable Accounting Period.

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By Tax Dragon
03rd Dec 2021 13:01

Sasha11 wrote:

What is the correct procedure in this case?

Go back to the accountant who filed.

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Replying to Tax Dragon:
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By Sasha11
03rd Dec 2021 14:25

I did. Unsuccessful

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Replying to Sasha11:
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By Leywood
03rd Dec 2021 14:35

You suggested the old Accountants were made aware prior to submission, how do you know this? If it’s documented by the clients then get the clients to go back to previous Accountants under their complaint process.

Out of interest why did they change Accountants?

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Replying to Leywood:
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By Sasha11
03rd Dec 2021 14:39

Based on what client told me and there was no notification with Companies House.

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By lionofludesch
03rd Dec 2021 14:47

Sasha11 wrote:

Based on what client told me and there was no notification with Companies House.

If I were you, I'd recommend that the new trade (if that's what it is) is transferred to a new company forthwith.

Let the old one go.

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Replying to Sasha11:
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By Leywood
03rd Dec 2021 14:54

Clients lie. Often. Changing Accountants allows lies. Be careful.

Did you have a decent professional clearance handover? Did it say ‘good luck’ or some such at the end?

Can you have a quiet word via a phone call to previous person, you might get the truth of the matter.

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Replying to Leywood:
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By Sasha11
03rd Dec 2021 15:10

Thank you for your advise. This client I know for ages. Good honest man. His company very straight forward, 1 man band. I honestly don't understand how it get messed up so badly. The Accountant could not even type correct balances from the bank and CT600(!) Exact his words - "ah don't you worry about those pennies". We are not talking here about large company.

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Replying to Leywood:
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By Paul Crowley
03rd Dec 2021 15:26

Concur
I do not often use the term Good Luck but twice now in a month
I also tend to add that ' advice from ourselves has not been followed' where warranted.
The latter usually means I chose not to continue the realtionship

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Replying to Leywood:
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By Sasha11
03rd Dec 2021 14:57

This is what client has confirmed. Then I asked the Accountant to explain on what grounds accounts has been prepared. The reply followed as below:
"A clearance letter under Dissolution of companies under Section 1003, Companies Act 2006: distributions to shareholders was also prepared".
They did not want to reply me in writing and ask if verbal communication okay instead. Than I was told that not such a letter has been prepared of cause. After my next question the Accountant said he need to go to the meeting.

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Replying to Sasha11:
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By Hugo Fair
03rd Dec 2021 15:12

Wherever that meeting was being held ... run (in the opposite direction)!

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Replying to Hugo Fair:
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By Leywood
03rd Dec 2021 15:22

Agreed.

Perfect get out clause as well - know the client personally, so ethics dictate you cannot act (per AAT).

Client needs to go back to Accountant, as has been said several times.

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By lionofludesch
03rd Dec 2021 13:05

Has it gone to liquidation ? Or even striking off ?

Sounds to me like the company has recommenced trading, marking the start of a new chargeable accounting period.

But your staccato style of posting leaves me doubtful as to the facts.

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Replying to lionofludesch:
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By I'msorryIhaven'taclue
03rd Dec 2021 13:28

Clickety Clack!

"Previous accountants submitted accounts based on that the company goes to liqudation."
Ok, cessation accounts filed.

There were 4K debit transaction on "capital distribution on cessation" in TB. No dividends.
Does "£4k debit" in the "capital distribution on cessation" in the TB mean £4k to distribute? Or a negative £4k figure?

Client decided to continue trading.
So amended accounts to submit then? Chop, chop! Before the company gets struck off the register.

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By Leywood
03rd Dec 2021 13:53

Do you have suitable qualifications, licence, PII and AML to be doing this kind of work? I wouldnt have thought a finance assistant was qualified to do so.

You should refer this back to the original Accountant and if they will not help, then to a suitably qualified professional.

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Replying to Leywood:
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By Sasha11
03rd Dec 2021 15:01

I have AAT qualification. I am full licensed member. I am very much doubting qualification and knowledge of the original accountant.

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Replying to Sasha11:
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By Paul Crowley
03rd Dec 2021 15:35

Check them
Dead easy
I check all accountants when cliets change both to and from
Often quite hilarious when you see what they themselves submit to companies house
The hilarity tends to be the new trader, one that I have never heard of before

I have 2 MAATs and an FMAAT as employees
I would not give this job to them

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Replying to Sasha11:
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By More unearned luck
03rd Dec 2021 20:06

I didn't appreciate that you needed a licence to be an accountant in the UK; It seems that your licence is what other professional bodies call a practicing certificate. But the thought brought to mind the Monty Python sketch about a many trying to buy a fish licence at the post office, who supported his argument with the clerk that there was such a thing as a fish licence with the fact that he had a cat licence that transpired to be a dog licence (dogs licences were abolished in the UK in 1988) with the word 'dog' crossed out and 'cat' written in in crayon that was sold to him by the man from the cat detector van.

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By Sasha11
03rd Dec 2021 14:36

To all. Firstly - thank you for all your replies.
I am qualified accountant. However, I just started not long ago to work for myself.
The reason why my question is a bit unclear is that I doubt every entry on the balance sheet that they have submitted. The bank balance is unbalance with the bank statement, the lability for Corp Tax is not adding up with CT600 and there is more.
To summaries all your answers I have to re-submit accounts to CH.

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Replying to Sasha11:
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By Paul Crowley
03rd Dec 2021 15:42

The Companies House bit is just not worth worrying about
It is the tax situation of company and shareholders that needs sorting out correctly.

Any decent accountant would have given the client full detailed accounts.

My expectation is that your client looked to get this done quick and either cheap or free

Easily confirmed by looking at the accountancy bills

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Replying to Paul Crowley:
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By I'msorryIhaven'taclue
03rd Dec 2021 19:17

All this is a splendid advertisement for grabbing onto the shirt-tails of someone who knows the ropes.

OP, I'm rather afraid you're having the wool pulled over your eyes by a semi-pro hustler. Consider declining the opportunity to perform for this prospect ("Having given the matter careful consideration, we feel you would be better served by agents who are geared to your particular needs. Therefore we must decline decline to act on your behalf, or otherwise represent you, on this particular occasion".)

You've already heard barge pole. How much more do you want!

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By Catherine Newman
03rd Dec 2021 19:49

I spent all morning yesterday who had screwed up my last year's book-keeping. This also relates to MTD and what a waste of time it is.

Clients put everything on software as a bill even when it has been straight away. The book-keeping leaves me with an accrual at 31 March for corporation tax. The client pays much later in the year, creates a bill and shows it being paid off and a deduction in a later year. I look at the system, recreate the real balance sheet by putting in the correct dates. OP. You might need to do likewise. It took me about 2 1/2 hours of brain-scratching to work it out.

Such a stupid error can take a long time to resolve like 3 hours. Luckily the director is also a friend with mutual friends and children we could discuss. As the client's family has health issues, I had to wear a mask in my own house for 3 hours.

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Replying to Catherine Newman:
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By bernard michael
04th Dec 2021 10:16

Catherine Newman wrote:

I spent all morning yesterday who had screwed up my last year's book-keeping. This also relates to MTD and what a waste of time it is.

Clients put everything on software as a bill even when it has been straight away. The book-keeping leaves me with an accrual at 31 March for corporation tax. The client pays much later in the year, creates a bill and shows it being paid off and a deduction in a later year. I look at the system, recreate the real balance sheet by putting in the correct dates. OP. You might need to do likewise. It took me about 2 1/2 hours of brain-scratching to work it out.

Such a stupid error can take a long time to resolve like 3 hours. Luckily the director is also a friend with mutual friends and children we could discuss. As the client's family has health issues, I had to wear a mask in my own house for 3 hours.


Is this an answer to the OP or another question??
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By Tax Dragon
04th Dec 2021 10:27

A temporary hiatus in a trading activity is sometimes ignored for tax purposes. (Obviously fact dependent.)

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