Close LTD company with taxes due

[Hobosapien]

Doesn't sound too bad if that fee includes preparing the final set of accounts.

If final accounts are already paid for somehow then it does seem a bit steep considering most of the info you need has already been provided in that statement.

[Fortis]

I'm looking to close my company down too as i've accepted a perm roll near home.
I just feel the market is slowing and with uncertainty in the UK economy I need job security.
My accountant said they can close my company for a fee of £770 = VAT!

This is what they said:

Closing the company
Closing the company is a relatively straightforward process, although it does take time. The first step is to ensure all money is collected/paid. Once this has been done we will prepare closure management accounts to determine the most tax efficient method to distribute the remaining profit in the company, which will be either by way of dividends or capital distribution. After we've advised you on the best way to distribute the remaining profits you can close the company bank accounts, transferring any money to a non-interest bearing personal account – this will later be used to pay any final corporation tax liability. The bank closure date will then be the final accounts date, and we will extend/shorten the next accounting period to then.

Final accounts are prepared, and the tax liability established. This tax will need to be paid straight away rather than waiting until the normal 9 months after period end. When we have confirmed that all tax has been paid, we will apply to Companies House for striking off – they will advertise in the London Gazette for 3 months before finally dissolving the company (assuming no objections from creditors).

Any money left within the company (that was transferred to the other bank account but not used to pay tax) will either be a final dividend or a capital distribution.

An individual currently has an annual exemption on capital gains of £11,100 with any amounts exceeding this figure likely to be taxed at only 10% following the application of Entrepreneurs Relief. From 1 March 2012 the amount that can be distributed in this way is limited to £25,000.

We will still be able to treat funds above £25,000 under the rules for capital gains tax. To do so, the company will require formal liquidation and we have links with an insolvency practitioner who will be able to guide you through the process.

If you decide to make the company dormant for the time being, it is important that it does not stay dormant for a period exceeding three years. Entrepreneurs Relief will no longer be available where a company has not traded in its final three years.

In addition, Entrepreneurs Relief is only available to individuals who have been an officer or employee of the company for the previous 12 months and hold at least 5% of the shareholding in the company.

There is a fair amount of extra work involved from our point of view here, so we make an additional charge of £750 plus VAT for the process. Your DD payment will obviously cease when the bank is closed.

Just ascertain the full costs of the procedure.

The £750 + VAT from the accountant will be to finalise everything. As an Insolvency practice ourselves, I can advise you that there will be a fee for the successful wind down of your company payable to the Insolvency Practitioner directly. It is likely that as a solvent business it will be dealt with via an MVL. Therefore, you need to establish what the I.Ps fee will be for the MVL also.

Happy to look at that too if you require.