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Ltd Company strike off before 1st CT submitted

Hello,

I have been asked to produce a set of accounts for a small LTD company. It is the first year of accounts so nothing has been submitted to CH or HMRC to date. However 2 months ago the DS01 was submitted before the final accounts and CT was submitted. It has been recieved and the first Gazette was posted.  If nothing is contested then the LTD Co will be struck off in the next few days.. and this is before I will be able to prepare the accounts as I am awaiting information. 

From research it seems that these final accounts will not be needed as by the time they are ready to be submitted the company will no longer exsist. The CT is expected to be minimal if of any value at all so should I still prepare the accounts? If the company has been struck off HMRC will not be able to do anything in terms of chasing the return or tax if the company no longer exsists?

Thanks 

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22nd Jul 2018 20:41

If you are subcontracting shouldn’t you be directing the questions elsewhere?

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to andy.partridge
22nd Jul 2018 21:02

Hi Andy,
Thank you for your reply.
Call this a general question then that I would like to understand further for my own knowledge....

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to SophieStephenson
22nd Jul 2018 22:04

Hello Sophie. If it were your client and you were an accountant with I would suggest that the DS01 would not be filed with Companies House until after the CT600 was filed with HMRC.

There is no point in preparing accounts for a company that no longer exists, but that is not yet the case.

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to andy.partridge
22nd Jul 2018 22:19

Thanks Andy, that is the conclusion I had come to.
Unfortunately the DS01 has already been submitted to companies house and processed. The two month notice on the first Gazette Notice is nearly up.

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22nd Jul 2018 23:13

Have you been paid yet to do the work?

If yes - carry on and do the accounts, whether they are of value or not.

If no - then you need to talk to the Director(s) and find out whether they still want the accounts, given the pending strike off. It is possible that HMRC have objected and that's why they want the accounts doing. I would also ensure that you get paid before continuing, if that's what they want you to do.

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By wamstax
23rd Jul 2018 10:55

Mistakenly striking a company off before its paid its dues once is an accident - twice is unfortunate and second/third time lucky may be selected as a serious tax defaulter with recourse against the officers of the company who may have been guilty of misfeasance and other such sinister faults.....including deliberate tax evasion.

Just thought I would mention it on a Monday morning during coffee break

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to wamstax
23rd Jul 2018 12:05

Yes, finally someone else has spotted why this so-called Spongebob plan is probably the worst tax evasion scheme ever invented!

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23rd Jul 2018 12:21

That all being said what you could do is ring up the ever helpful Companies House and ask them for some of their most useful advice.

Oh wait they say there is no need for accounts if the company is struck of but can not tell you why, just that it is their practice, and refer you to an accountant.

What is helpful is they say if it is stuck off before any accounts are filed they take no further action, which does point out he stupidity of having a filling rule if it can be got round with potentially massive debts just by no filling.

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By wamstax
to timothyvogel
23rd Jul 2018 12:42

Yes but I fear you are missing the point ….. It is not companies house you have to worry about it is HMRC and if you make a habit of it.
Unfortunately too many directors/shareholders misunderstand that the company's money belongs to the company and any director is the protector of the company's coffers... so if he/she steals the company's money without taking care of all the proper dues e.g. CT or PAYE or VAT then misdemeanours can be corrected by insolvency action. Just because the company is struck off doesn't necessarily mean that nobody can do a thing about it

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to wamstax
23rd Jul 2018 13:02

Hi,

Please could I ask what your course of action would be then inlight of your statement?

Thanks

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to SophieStephenson
23rd Jul 2018 14:07

Impress upon the directors that the process should be stopped until the appropriate returns have been filed and taxes paid. Refer them to the ant-Money Laundering note in the letter of engagement as to the accountant's own legal responsibilities if they fail to comply.

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By wamstax
to SophieStephenson
23rd Jul 2018 15:31

Afraid that is for you and your ethics to consider. The directors could always approach HMRC to say that they should maybe object to the striking off - all notices are sent to HMRC to consider for the strike off but inevitably history or the lack of it can lead to no objection being made and the true facts only arise in future months or years when for example HMRC are "risking" a taxpayers compliance.

If it is an accident then beyond the above or advising the directors that they shouldn't proceed there's not much you can do. BUT if they've done it before do you really want to be associated with that sort of thing. Up to you.

Unfortunately HMRC can of course review the involvement of any tax agent or accountant and the performance and if you have been guilty of facilitating Tax Evasion then you could end up with a penalty in your own right.

Is it worth getting your reputation tarnished for the pittance that you will get for the small account?

Also depends on if you are a member of any accountancy etc body who will have their own guidelines

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