Cost effective way to shut down a recently set up LTD

**tractor** · 31 July 2014, 21:33

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Originally posted by blu View Post

Hi all,

In May I went for an interview for a contractor role, got accepted, agent sent over a signed contract, I signed & returned it and they asked me to resign from my then current perm position, so I gave my 30 day notice. I then went on to create an LTD and sign up to Crunch accountants (after spending many hours reading this forum in fact

).

Monday of my last week at my perm job (early June) I get an email from the agent that the project at the new place has been pulled and the contract has to be terminated.

Couldn't get my perm position back so I've spent the last two months looking for work and I'm thinking of going permanent again.

So now I'm wondering how to deal with this LTD I've setup and the ongoing accountancy costs.
I used Crunch's service to set it up and they signed it up for VAT and I even got my own UTR (Unique Taxpayer Reference) and company business account.
Crunch is saying they offer a dormant service but any use of keeping it if I'm going to be in a perm position for at least the next two years?

So my question is how can I go about winding it down such that down the line the gov (HMRC/company house/etc) doesn't sue me for not submitting some papers to them or something like that?
The most cost effective route would be appreciated as I've already paid plenty to start and maintain the company and would like to avoid wasting more money as I'll be facing some cashflow problems soon.

Also since I got a UTR now do I need to fill in a tax return every year going forward even though my employer will be doing my taxes using the PAYE? Any way to avoid that?

Any other surprised I should avoid now that I've dipped my toe in these waters?

Thanks in advance for any advice you can give.

I wouldn't shut it down just yet, costs aren't going to mount up that quickly. I would continue looking for contract as well as perm, if a role comes up, you are already set up for it. If a perm role comes up, close it then, it only takes 3 months and your accountant will advise how to go about it properly.

Then, all your outlay may not be wasted

**TheCyclingProgrammer** · 31 July 2014, 21:39

Re: self assessment, unless you've registered then there shouldn't be any need to.

In any case, you'll receive a notice to file a tax return if you're required to do one. If you don't get one, you don't need to do one.

HMRC state that directors need to do one but there is no legal basis for this. I certainly wouldn't bother registering unless you think you'll have income to declare.

Just to reiterate, if you have untaxed income to report you'll probably need to register and it certainly needs to be declared.

If you have a UTR it could be that you have been registered, unless the UTR is actually for YourCo?

If you're registered, but have no income to declare and haven't yet received a notice to file you can ring HMRC and they might be able to cancel your registration.

**blu** · 31 July 2014, 21:59

Thanks for both your replies.

Indeed I did keep the company going for 2 months just to see if I land another contract. I have got some offers but have decided to go with a perm offer hence the reason for this post.

No doubt the accountants can sort everything out, but they charge and that's why I'm asking for the most cost effective way to do this. Accountant's way is last resort.

RE: UTR
I too wonder if UTR means that I have been registered; I'll ask the accountants.
But thanks for the suggestion of calling HMRC to cancel registration, I'll try that.

**Anika** · 1 August 2014, 09:18

Hi Blu,

I would cancel the VAT and PAYE registrations with HMRC (if you have been registered), and then you can strike the company off by submitting a DS01 form to Companies House provided the company has not traded. Companies House charge an admin fee of £10 to strike the company off, and it normally takes about 3 months for it to be dissolved.

I hope this helps :-)

**blu** · 1 August 2014, 10:10

Yes that's helpful thank you Anika
Is that really all? Sounds simple enough. The accountants seem to be asking for quite a bit of money to do it.

I've not traded through the company yet, there's only been the accountancy charges but I've not even entered those in the accountants software yet so no income / expenses have been registered in the company accounts yet. Any point of registering the expenses even?

So if I do as Anika says I don't need to fill out any forms at the end of the year or later on?

**Anika** · 1 August 2014, 10:48

Hi Blu,

The only time I would register the expenses is if you are thinking of keeping the company open, and contracting through it at a later stage. If you want to close the company down and are looking for a way to do this in a cost effective way, then submitting the DS01 form is the simplest way.

You should not need to file any other company returns with HMRC once the company is dissolved (i.e. no accounts or Corporation Tax returns).

The only form you may have to complete is the Self Assessment Return if you have been registered for this by your Accountants. It would be best to check with them on this matter

**Martin at NixonWilliams** · 1 August 2014, 11:23

I echo Anika's advice however you will also need to deregister for corporation tax aswell as PAYE & VAT.

I hope this helps.

Martin

Cost effective way to shut down a recently set up LTD