Dormant accounts

[iburnell]

I've been offered a 12 month fixed term contract by my current client which means I want to make my company Dormant for 2016 (my year end is 31/12). My accountant seems unable to give me clear answers as to how to deal with it . I'm being quoted £350-500 to submit accounts but what accounts?. I thought it was simply a question of sending a letter to companies house saying this company hasn't traded in 2016 and even if they do need to put through a set of "null" accounts why so costly?. Then there's the business Bank account. I was told it would be cheaper if I close the bank account down. Ok fair enough but how do I pay any moneys due such as VAT and Inland Revenue in January 2016. My concern is that is you are paying money in 2016 then its not dormant as such. Anybody recommend award winning accountant by the way - think I might change

[northernladuk]

I'd use the opportunity to shut the company and make some use of the tax advantages available.... If you've got money in there.

[AtW]

I'd use the opportunity to shut the company and make some use of the tax advantages available.... If you've got money in there.

+1

Do it before Gideon replaces "archaic" Entrepreneurs Relief with "simplified" income tax level band.

[Michael at BI Accountancy]

I've been offered a 12 month fixed term contract by my current client which means I want to make my company Dormant for 2016 (my year end is 31/12). My accountant seems unable to give me clear answers as to how to deal with it . I'm being quoted £350-500 to submit accounts but what accounts?. I thought it was simply a question of sending a letter to companies house saying this company hasn't traded in 2016 and even if they do need to put through a set of "null" accounts why so costly?. Then there's the business Bank account. I was told it would be cheaper if I close the bank account down. Ok fair enough but how do I pay any moneys due such as VAT and Inland Revenue in January 2016. My concern is that is you are paying money in 2016 then its not dormant as such. Anybody recommend award winning accountant by the way - think I might change

There are two ways you can do this, the first and easiest method for an accountant is to submit a set of dormant accounts in a similar fashion to that of full accounts (using there accounting software) judging by the price quoted (high in my opinion) I would hazard a guess that this is what is being proposed. The second way is like you say, you can make the company dormant with companies house and fill out a form for the dormant accounts (can be rather time consuming if you don't know what your doing).

As everyone has suggested, it would be worth looking at closing down the company to take advantage of any tax savings (especially if you are not going to be contracting for at least 12 months).

[NibblyPig]

Keep in mind shutting it down and reopening it might cause issues with hmrc, and it can costs thousands of pounds to pay for a liquidator.

[northernladuk]

Keep in mind shutting it down and reopening it might cause issues with hmrc, and it can costs thousands of pounds to pay for a liquidator.

But it won't because he's gone permie for a year in between. It doesn't if you use something like Maslins's MVLOnline. I think nixon Williams was quoting 2-3k for it a while ago. You only need that if you've got over 25k in the account I think.

[VectraMan]

If you think you're likely to be contracting again in a year I would just keep it going. Making it dormant, closing the bank account and still paying an accountant seems a bit ridiculous.

[d000hg]

The obvious question seems to be why they want you to go FTC when you're already contracting with them, and why you're not pushing back on this.

FTC effectively makes you an employee so couldn't this also look bad for IR35, if you carry on doing the same job employee->contractor that's a red flag so why not the reverse too?

[sal]

Correct me if i'm wrong, but I believe that closing the company makes you immune for IR35 investigations of contracts you worked on through that company. In which case this should be the best option which will limit the exposure of having FTC after contract with the same Client.

[northernladuk]

Correct me if i'm wrong, but I believe that closing the company makes you immune for IR35 investigations of contracts you worked on through that company. In which case this should be the best option which will limit the exposure of having FTC after contract with the same Client.

Completely wrong and 'immune'... really?

http://www.contractorweekly.com/cont...any-avoid-ir35