• Visitors can check out the Forum FAQ by clicking this link. You have to register before you can post: click the REGISTER link above to proceed. To start viewing messages, select the forum that you want to visit from the selection below. View our Forum Privacy Policy.
  • Want to receive the latest contracting news and advice straight to your inbox? Sign up to the ContractorUK newsletter here. Every sign up will also be entered into a draw to WIN £100 Amazon vouchers!

DS01 and corporate tax

Collapse
X
  •  
  • Filter
  • Time
  • Show
Clear All
new posts

    DS01 and corporate tax

    Hello

    My question is about a contractor limited company (PSC) and striking off DS01.

    Does a LTD company have to pay off all of the corporate tax year from the tax year before?

    What happens if the LTD company does not have enough funds to pay completely?

    What happens if the LTD company has not been trading for over 9 months already (Because of COVID-19, moved to inside IR35 and / or contractor has gone permanent / contractor got seriously sick unemployed / contractor seriously long-term benched)
    Last edited by rocktronAMP; 13 January 2021, 15:16. Reason: clarity

    #2
    Yes

    Put some funds in and pay it off. Any dividends you've paid while not being able to pay tax liability will be considered illegal.

    Length of time not trading is irrelevant.
    'CUK forum personality of 2011 - Winner - Yes really!!!!

    Comment


      #3
      Yes, you will need to pay off. The DS01 is for a solvent company, not an insolvent one.

      Comment


        #4
        Originally posted by rocktronAMP View Post
        Hello

        My question is about a contractor limited company (PSC) and striking off DS01.

        Does a LTD company have to pay off all of the corporate tax year from the tax year before?

        What happens if the LTD company does not have enough funds to pay completely?

        What happens if the LTD company has not been trading for over 9 months already (Because of COVID-19, moved to inside IR35 and / or contractor has gone permanent / contractor got seriously sick unemployed / contractor seriously long-term benched)
        The limited company has to pay the corporation tax for the previous financial year. If the company doesn't have the funds to pay it, call up HMRC and request a payment plan. If you ignore it, the corporation tax is still due and interest is charged on top.

        If you're making a loss in the current financial year, once the year end has passed, you can carry that loss back and offset it against profits in the previous financial year.

        What was the question about DS01? If you're looking to strike the company off the register, you'll need to clear the corporate tax owed otherwise HMRC will object to the winding up and you'll go round in circles.

        Comment


          #5
          Originally posted by Craig@Clarity View Post
          The limited company has to pay the corporation tax for the previous financial year. If the company doesn't have the funds to pay it, call up HMRC and request a payment plan. If you ignore it, the corporation tax is still due and interest is charged on top.

          If you're making a loss in the current financial year, once the year end has passed, you can carry that loss back and offset it against profits in the previous financial year.

          What was the question about DS01? If you're looking to strike the company off the register, you'll need to clear the corporate tax owed otherwise HMRC will object to the winding up and you'll go round in circles.
          It is very clear now. CT must be paid. I get it.

          Both myself and a contractor acquintance have similar problems: closing LTD companies after not using them for 9 months or so.

          He is a lot better off than me, because my friend landed a sensible job (contract -> permanent -- 2 weeks holiday!). I was on the bench this time last year and I took out too much money. His track / destiny is a better, a LTD surplus. "Lucky bugger", I said, even CT, he said. He should go with MVL. We both didn't have huge dolops of cash in a LTD lying around though. I certainly don't anymore.
          Haha.
          Last edited by rocktronAMP; 14 January 2021, 12:36. Reason: clarity

          Comment


            #6
            Originally posted by rocktronAMP View Post
            It is very clear now. CT must be paid. I get it.

            Both myself and a contractor acquintance have similar problems: closing LTD companies after not using them for 9 months or so.

            He is a lot better off than me, because my friend landed a sensible job (contract -> permanent -- 2 weeks holiday!). I was on the bench this time last year and I took out too much money. His track / destiny is a better, a LTD surplus. "Lucky bugger", I said, even CT, he said. He should go with MVL. We both didn't have huge dolops of cash in a LTD lying around though. I certainly don't anymore.
            Haha.
            So you have a Corporation tax for last year due to profits and a loss this year due to no income coming in.

            Should be fixable long term so just create a final set of accounts and work from there.
            merely at clientco for the entertainment

            Comment

            Working...
            X