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Paying Dividend from non trading company

Do I need to submit CT600?

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My "micro entity" limited company has not traded for last five years and there were no transactions but it had retained c£50k net profit in the bank account since 2014. I paid the two directors(self and wife) c£40k in divis in last financial year ending 31 Dec 2018. As well as submitting the Annual Confirmation and Micro Entity Accounts to Companies House as usual, do I need to submit CT 600 (?) to HMRC. There are no plans to commence trading as I have retired but I will keep it going just in case I need it in future ( and to pay out the remaining net profit of c£10k at some time).

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07th Feb 2019 16:18

No interest on the cash deposit of £50,000?

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By Camax
to johngroganjga
07th Feb 2019 16:40

No John it wasn't worth the hassle as interest rates are low and it would have affected the status.

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to Camax
07th Feb 2019 17:37

You do know that the rate of corporation tax on interest is less than 100% don’t you?

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By DJKL
to johngroganjga
07th Feb 2019 18:02

Unless you shop around the interest is barely worth it, up to last year we were earning 0.10% on our deposits, I have now managed to get 0.40%, but frankly I came to the point where the bookkeeping time needed to record monies up to deposit was really not worthwhile in sums less than £30k (previously I used to shuffle up every spare £10k) and that is for a company that is trading- I have sympathy with the OP's perspective.

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08th Feb 2019 07:37

Probably not, but what's the harm? You could have done it in the time it took to ask the question.

Btw, you don't pay dividends to directors. You pay them to shareholders. If you took steps to equalise the holdings prior to the dividends, you might want to consider a disclosure to that effect to protect yourself from future discovery. It's low risk either way, but I would take the precaution myself.

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08th Feb 2019 10:02

I would be inclined to wind it up and start a new one if indeed you do end up needing a company for something in the future. It only costs a few quid to set up, worth it to save you even one year of filing accounts and the winding up is simple with only £10,000 reserves.

The one exception would be if you have other capital gains this year but not in the future I suppose.

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08th Feb 2019 12:53

Get HMRC confirmation and wind company up now.
Assuming 2 shareholders and no other gains in the year for them there will be no tax to pay on distribution.
You will only have to do it sometime in the future and if you pay dividends, at the current nil rate dividend band, it will take a further 2-3 years to withdraw all of the funds.
No CT600 to submit as long as HMRC is aware that the company is dormant. If they have issued a notice to the company to submit a return then you will have to do so.

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