What happens if I can't find another contract and have to go perm ?

[kingcook]

In a similar situation myself. I've been advised that to close the company itself could cost in the region of £1500.. which itself makes me think it might just be worth keeping it going for another 18 months (it'll cost exactly the same in payments on a monthly basis to the accountant) - in hope that something might come up in the world of contracts; or I might find other uses for the company.. rather than forking the 1.5k in liquidation fees . Or - am I missing a trick here?

£1500?!?! Did they throw some magic beans into the deal aswell?

[Maslins]

Re costs of closing a company, you've typically got two choices:

Strike off - cheap and cheerful, £10 cheque to Companies House with form DS01. You do need to ensure creditors are paid and arrange a few other bits and pieces, possibly including a closing set of accounts/corporation tax return, so accountants will often charge several hundred pounds to assist with this.

Liquidation - much more expensive (typically low 4 figures), formal process which must be done by a licensed insolvency practitioner.

These days, main benefit of a liquidation is if you've got >£25k net assets in the company, it enables the funds to be taxed on the shareholder(s) as capital gains, rather than dividends. Can be useful if you qualify for entrepreneurs relief.

[radish2008]

Thanks all - I've got a few months left yet so will have a further think.

[dmo]

I was recommended by the accountant to take the liquidation route. Still haven't got round to deciding yet. If it can cost as little as £10 then I'd definitely shoot for that route. The fact that the accountants then charge many £100's is annoying though

[Wanderer]

I was recommended by the accountant to take the liquidation route. Still haven't got round to deciding yet. If it can cost as little as £10 then I'd definitely shoot for that route. The fact that the accountants then charge many £100's is annoying though

They are only charging to do the final accounts. You can't just close a company mid way through a trading year without filing accounts, can you? Trying to close the company and refusing to file accounts will piss HMRC off, they will object to the striking and it might get you investigated which will cost a whole lot more so do it properly...

Not sure why your accountant suggests that you liquidate the company if you have little or no reserves left in the company though. As Maslins says, this is really only an option if you have >£25k from what I understand.