Firstly the processes below both are on the basis that the company does NOT owe anyone any money. This means no suppliers are owed, no outstanding finance and HMRC are paid up to date. If that is not the case please reach out to us via email.
The process is fairly straightforward but let’s cover the two differences first
1 – Funds in the bank after tax paid greater than £25k
2 – Funds in the bank after tax paid less than £25k
Situation 1 – Funds in bank after tax paid greater than £25k
If you have more than £25k in the company bank accounts after deducting any tax owed to the point of ceasing to trade then you will need help from a licensed specialist. We can still sort the elements to prepare the company for closure but the closure process needs to be managed by a specialist accountant. We recommend www.mvlonline.co.uk as they are excellent at what they do and the costs are clear (expect around £2k). Even though there are additional costs involved the tax savings of taking advantage of these special measures are sizeable (in many cases reducing the tax rate from 32.5% to 10%).
Situation 2 – Funds in bank after tax paid less than £25k
If you have less than £25k in the company bank accounts after deducting any tax owed to the point of ceasing to trade then you can take advantage of some specialist tax measures and you don’t need to appoint a licensed specialist as we can handle this for you. You get to take advantage of some special tax measures which reduce your tax rate (in many cases from 32.5% to 10%) meaning a potential £6.5k tax saving.
Whichever situation applies the steps involved are the same up to a point.
To start the process please complete this form – https://form.jotform.com/202963614287057
1 – Cease trading via the business and inform us of the last date of trading
2 – De-register from VAT and file a final VAT return
3 – De-register as an employer and process any leavers
4 – Prepare accounts up to the cease of trade and file to HMRC and Companies House
5 – Pay any corporation tax due or await a refund
6 – Appoint licensed specialist if over £25k in the bank and follow their process (otherwise see 7)
Our assistance assisting with all the de-registrations and preparation of the company ready for close (excluding final accounts preparation) attracts a fee of £238 + VAT.
7 – If funds below £25k and 3 months have passed since trading ceased (the last sale made) then apply to close the company
8 – Remove all remaining funds from company bank accounts and close them down.
9 – Company is closed after further 2 or 3 months – there is no warning and any assets (including cash in the bank) remaining at this point now belong to the crown.
10 – Ensure you declare the correct withdrawal amount as a capital distribution on your personal tax return. We can do this for an additional fee. Please ask for further information.