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Solvent liquidation

What to submit to HMRC and what reference to use?

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A client ceased trading on 31 December and I have prepared the accounts, deregistered for VAT and have the corporation tax figure ready to pay. A liquidator has been appointed for a solvent liquidation. The year end isn’t until February but the liquidator said I don’t need to submit accounts to Companies House.

Does anyone know what I submit to HMRC? Do I change the year end to 31 Dec at CH or just submit accounts and CT600 to HMRC to 31 Dec? What reference does the client use to pay the corporation tax?

Thanks for any assistance.

Replies (18)

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RLI
By lionofludesch
15th Jan 2020 15:40

File nothing at Companies House.

File CT600 with some rudimentary accounts to HMRC. The CAP is from last year end (presumably 1 March 2019) to cessation of trade. They'll accept a pdf if you tick the right boxes on the front page.

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Replying to lionofludesch:
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By Matrix
15th Jan 2020 16:27

But there won’t be an accounting period since I have not written my usual letter to HMRC about the cessation of trade since it is a liquidation.

Shall I just file and then call up and get them to set up the AP?

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Replying to Matrix:
RLI
By lionofludesch
15th Jan 2020 16:38

Matrix wrote:

But there won’t be an accounting period since I have not written my usual letter to HMRC about the cessation of trade since it is a liquidation.

Shall I just file and then call up and get them to set up the AP?

What ???

That's not how CT works. It's not like VAT.

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Replying to lionofludesch:
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By Matrix
15th Jan 2020 19:48

Each accounting period has a separate reference and in my experience unexpected tax is repaid by cheque. So I need a reference. Further to the advice below, no tax payment will be made until advised by the liquidator, I will just advise the client the amount. I still don’t know what date to draw up the accounts to so can’t file the CT600 in any case.

If is my first MVL but thought others may have practical experience of these matters.

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Replying to Matrix:
RLI
By lionofludesch
15th Jan 2020 19:57

Matrix wrote:

Each accounting period has a separate reference and in my experience unexpected tax is repaid by cheque. So I need a reference. Further to the advice below, no tax payment will be made until advised by the liquidator, I will just advise the client the amount. I still don’t know what date to draw up the accounts to so can’t file the CT600 in any case.


Cessation of trade starts a new chargeable accounting period.
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Replying to lionofludesch:
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By Matrix
15th Jan 2020 20:03

Thanks, that is what I have done but have not filed. So I do file the CT600 to the cessation of trade?

Have you done this? And a separate one to the date of the MVL? This contradicts the liquidator’s advice below so shouldn’t I wait for the liquidator to advise my client?

I really need an accountant to advise what they did for an MVL since my questions are more of a practical nature.

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Replying to Matrix:
RLI
By lionofludesch
15th Jan 2020 20:25

Yes. One to the date of cessation then one to the date of liquidation.

The planning trap is you can't carry forward trading losses against capital profits made as the business is wound up.

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Replying to lionofludesch:
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By Matrix
15th Jan 2020 20:28

Thanks Lion. So I file the CT600 to 31 Dec and then it will appear on HMRC with a reference so my client can pay the tax. I know I am being pedantic but I really wanted it off my desk this week and then the client deal with the liquidator. Noted that I will have to file the nil CT600 but won’t be for a while.

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Replying to Matrix:
RLI
By lionofludesch
15th Jan 2020 21:29

Matrix wrote:

Thanks Lion. So I file the CT600 to 31 Dec and then it will appear on HMRC with a reference so my client can pay the tax. I know I am being pedantic but I really wanted it off my desk this week and then the client deal with the liquidator. Noted that I will have to file the nil CT600 but won’t be for a while.

Yes. I'm sure I've changed dates on CT600s before now.

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Replying to Matrix:
RLI
By lionofludesch
15th Jan 2020 21:29

Matrix wrote:

Thanks Lion. So I file the CT600 to 31 Dec and then it will appear on HMRC with a reference so my client can pay the tax. I know I am being pedantic but I really wanted it off my desk this week and then the client deal with the liquidator. Noted that I will have to file the nil CT600 but won’t be for a while.

Yes. I'm sure I've changed dates on CT600s before now.

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Replying to Matrix:
RLI
By lionofludesch
15th Jan 2020 21:29

Matrix wrote:

Thanks Lion. So I file the CT600 to 31 Dec and then it will appear on HMRC with a reference so my client can pay the tax. I know I am being pedantic but I really wanted it off my desk this week and then the client deal with the liquidator. Noted that I will have to file the nil CT600 but won’t be for a while.

Yes. I'm sure I've changed dates on CT600s before now.

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Lisa Thomas
By Insolvency Practitioner
15th Jan 2020 16:11

You won't file anything with C House as the Declaration of Solvency replaces the need to file returns with C House.

The Liquidation will also create a new tax year end date and you will need to submit any final returns to the date of Lqn with HMRC so that the Liquidator can obtain HMRC's clearance.

I'm surprised the Liquidator hasn't explained this?

Thanks (1)
Replying to Insolvency Practitioner:
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By Matrix
15th Jan 2020 16:36

I usually send the CT600 to the client together with the tax payment and payment reference. I wanted the client to pay the tax now before handing everything to the liquidator but HMRC will repay if they are not expecting it.

Are you saying that I don’t file a CT600 to the date the company ceased trading but to the date of winding up instead? And what tax reference for the payment if HMRC aren’t expecting it or do they send a reference?

What will happen if I file this CT600 to we Dec, will there just be a nil one from 1 Jan to the winding up date?

Thanks

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Replying to Matrix:
Lisa Thomas
By Insolvency Practitioner
15th Jan 2020 16:34

Usually I recommend the accountants hold off filing anything until post Liquidation so you then have the new tax date to work to.

You could send everything off in advance but will then have to do another return for the hiatus period to the date of Lqn...

The Company could still make a payment on account of the anticipated tax in order to reduce interest which will become payable from the date of the MVL (regardless of the fact the tax is being paid early but note that the Liquidator can often claw this interest back by submitting subsequent documents to HMRC)

What's the Company's year end and what is the expected date of the MVL?

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Replying to Insolvency Practitioner:
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By Matrix
15th Jan 2020 16:39

Year end is Feb. I just want to tell the client how much to pay and get it off my desk but it sounds like I can’t do that until the liquidator gives me the date of the MVL. Any tax payments made would be repaid by cheque so need the exact reference. Will have to wait for instructions from the liquidator.

Thanks

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Replying to Matrix:
Lisa Thomas
By Insolvency Practitioner
15th Jan 2020 16:44

The reference will not change.

Options:

1. Submit returns to Feb then subsequently submit another return from 1st March to date of MVL.

2. Wait for MVL then submit one return to date of MVL.

You will no doubt need to calculate the taxes anyway for the Declaration of Solvency figures.

Liquidator should ensure you are paid for any extra work involved.

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Replying to Insolvency Practitioner:
RLI
By lionofludesch
15th Jan 2020 17:15

Insolvency Practitioner wrote:

Usually I recommend the accountants hold off filing anything until post Liquidation so you then have the new tax date to work to.

How is the tax paid after the liquidation is complete ?

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Replying to lionofludesch:
Lisa Thomas
By Insolvency Practitioner
16th Jan 2020 09:09

Tax is either paid by the Company on account pre Liquidation, or the Liquidator will arrange to pay it before closing the MVL.

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