Killing off your company - Use form DS01 or not bother?

[Gonzo]

I stopped trading about 18 months ago. So far I have not applied to dissolve my company because I am expecting some interest from HMRC for corporation tax paid early. From another thread it sounds like it would have been easy enough not to bother.

In the next few months it will be time for me to send another annual return and accounts will be due too.

I am not going to ask my accountant this question because I think it would be a bit cheeky since I have not paid him any money for eighteen months, I will leave it to the esteemed panel

Before we parted company, my accountant suggested that I do not need to do anything to dissolve the company. The bank would close the company bank account itself when I stop using it and Companies House will dissolve the company when I stop sending documents in.

Now I don't like the idea of leaving these loose ends and not complying with all my obligations as Director but my question for the panel is am I worrying about nothing?

Should I just do nothing and save myself the £10 fee for Companies House processing the DS01 form, or should I do things by the book?

[Stag Cozier]

I would say do it by the book. Even if you havent traded for 18 months, what about if there is any profit in the company which would be treated as capital distribution? This may possibly need to go on your tax return as CG.

Best to bring your accounts up to date even if it is for your purpose only to establish if all taxes have been paid (mainly CT) and any profit left. If there is no profit and no taxes to pay, close your business bank account down, get the CT interest paid to you personally and spend £10 filing a DS01. It's cleaner, proper and doesn't look like bad form should you decide to run another company in the future.

[xoggoth]

I'm in same position. No new income for only 3 years but haven't been able to close it due to waiting for an amount from some administrators of a previous client. Got it now so hopefully, once tiny bit of CT on it is settled in a couple of months.

I would be very wary of not going through formal procedures. I certainly haven't seen any sign of the bank closing my accounts as your accountant said, not even the reserve account that I stopped using yonks ago. (Having once forgotten to transfer enough back to current to pay my VAT). And isn't it technically a criminal offence not to submit a company return?

[Sally BFCA]

Before we parted company, my accountant suggested that I do not need to do anything to dissolve the company. The bank would close the company bank account itself when I stop using it and Companies House will dissolve the company when I stop sending documents in.

If Companies House strike you off the register for not filing the annual return; which they eventually will, then ALL money left in the company bank account becomes property of the Crown.
It is advisable to close the company via the correct route.

[Gonzo]

Perhaps I should add some more details.

I stopped doing any contracting at the end of November 2008. The company year end date was changed to 30th November and the accountant prepared final accounts up to that date.

HMRC confirmed that ESC16 could be applied and all remaining cash was taken out.

There has been no income since November 2008 and the company bank account has long been emptied so I am not concerned about declaring further income or losing money in the account if it is closed.

I only kept the company and the bank account open so that I could bank this pesky interest cheque but the amount of the cheque is unlikely to be much more than the £10 cost of the DS01 form.

[malvolio]

Perhaps I should add some more details.

I stopped doing any contracting at the end of November 2008. The company year end date was changed to 30th November and the accountant prepared final accounts up to that date.

HMRC confirmed that ESC16 could be applied and all remaining cash was taken out.

There has been no income since November 2008 and the company bank account has long been emptied so I am not concerned about declaring further income or losing money in the account if it is closed.

I only kept the company and the bank account open so that I could bank this pesky interest cheque but the amount of the cheque is unlikely to be much more than the £10 cost of the DS01 form.

Professional to the end. Well done.

Do the sodding form, it's only £10 and it makes it simple. Why is it even a question?

[Gonzo]

Okay, okay. I'll pay the £10 and do the form.

My accountant had hinted that it wasn't really necessary, although he wouldn't state that explicitly in writing. I thought I would see what other people thought.

[Wanderer]

Okay, okay. I'll pay the £10 and do the form.

My accountant had hinted that it wasn't really necessary, although he wouldn't state that explicitly in writing. I thought I would see what other people thought.

If you don't file returns then Co. House moves to strike. The IR will object if they think you may owe taxes or else it's automatically struck off. I think the trouble is that HMRC don't know if you traded after the ESC-16 so they might object and cause some unpleasentness.

Probably best to go through the proper process, if nothing else it will get rid of the company quicker.

[Sockpuppet]

We should probably add Gonzo moved to New Zealand so its a bit harder than just "posting a cheque".