Reply to: Closing a dormant company

[Asha]

Thanks for the quick reply. Only change now is the company assets is less than 25k, so dont need to go through mvl route anymore. Talked to an accountant who says they will not file 2017 year end accounts but just help me with the closure for 150+vat. Is that the right way to go?

Any recommendations for the accountant?

[WTFH]

Hi

I would like to close my non trading limited company .
The company doesn't have any income since 2013. It does have outgoing of bank charges, payments to a charity and dividend payout etc. I have filed tax returns till 2016. Since I want to close the company, do I need to file year end tax returns for 2017 before closing the company?
The balance in company is around £15k which I would like to take as my final dividend payments.

Please let me know what do I need to do to close the company?
Do I need to hire an accountant to do the work or can I do it myself?

Hi Asha,
I'm not sure what has changed since you last asked the same question in 2016, but the advice given back then is still valid.

Get an accountant to do it for you.

[TonyF]

Have you considered claiming entrepeneur's relief on the £15000? You might save money that way.

[Asha]

Closing a non trading company

Hi

I would like to close my non trading limited company .
The company doesn't have any income since 2013. It does have outgoing of bank charges, payments to a charity and dividend payout etc. I have filed tax returns till 2016. Since I want to close the company, do I need to file year end tax returns for 2017 before closing the company?
The balance in company is around £15k which I would like to take as my final dividend payments.

Please let me know what do I need to do to close the company?
Do I need to hire an accountant to do the work or can I do it myself?

[Maslins]

If you've got ~£50k net assets and want to get it below £25k without suffering personal tax you'll presumably be stuck at taking no more than £5k dividends per tax year (assuming current tax rules stay as they are). Therefore 5-6 years of having to do accounts and drip feeding dividends, plus of course potential tax changes along the way which could work either for or against you (though with the government deficit as it is I imagine unlikely things are going to change for the better any time soon).

Alternatively you may want to look into the option of sticking ~£30k into a pension scheme to get the net assets down quicker. You'll need to check with your accountant whether you could get corporation tax relief on that.

Otherwise your main option would be an MVL. I am potentially biased as 50% owner of MVL Online, but it can be a good way to get all the cash soonish (months rather than years) and have it in your own hands rather than in a pension which you may not be able to access for a few decades. Typically you'll pay circa £1.6k-1.7k costs (inc VAT and disbursements), and tax-wise you'll likely get £11k tax free and pay 10% on the balance...though do check these with your accountant as your personal circumstances might mean these don't apply.

[EinsteinTax]

@OP, congratulations on the pregnancy [/mumsnet]



But if she's perm (which she said she was) then her employer will pay her maternity pay, the salary of which will almost certainly be a lot more than her average salary for the past 6 months from her Ltd (so a lot better for those first 6 weeks)

It depends on individual circumstances, but in some cases it is possible to receive maternity pay from more than one employer. Definitely worth a chat with the accountant to go through in more detail.

[northernladuk]

@OP, congratulations on the pregnancy [/mumsnet]



But if she's perm (which she said she was) then her employer will pay her maternity pay, the salary of which will almost certainly be a lot more than her average salary for the past 6 months from her Ltd (so a lot better for those first 6 weeks)

Holy cow.. A nearly useful post. Am liking the new you.

[pr1]

@OP, congratulations on the pregnancy [/mumsnet]

You may also be able to claim maternity pay through your limited if you are still on the payroll, so worth speaking to your accountant sooner rather than later.

But if she's perm (which she said she was) then her employer will pay her maternity pay, the salary of which will almost certainly be a lot more than her average salary for the past 6 months from her Ltd (so a lot better for those first 6 weeks)

[barrydidit]

Bugger Darren.

Sorry NLUK, you must have quicker fingers than me!

It's not his fingers you need to worry about....

[northernladuk]

If you are still waiting then have a look at MVLOnline.co.uk in the meantime in case you need to go down that route. Not sure they will be too willing to get in to your tax situation but can certainly give you some clarity around MVL if you need to go that way.

[Darren at Fox-Bartfield]

Company Closure

Sorry NLUK, you must have quicker fingers than me!

[EinsteinTax]

Bugger Darren. I said it first!!!

Sorry NLUK - I agree with you too

[northernladuk]

I agree with Darren - it's best to speak to your accountant on the most efficient way to close it.

Bugger Darren. I said it first!!!

[EinsteinTax]

I agree with Darren - it's best to speak to your accountant on the most efficient way to close it.

If there is no immediate need for the cash, one option would be to just keep it running and take £5k dividends per year tax free until you get below £11k and then take the remainder as a capital distribution on closure.

You may also be able to claim maternity pay through your limited if you are still on the payroll, so worth speaking to your accountant sooner rather than later.

[Darren at Fox-Bartfield]

Company Closure

Be an idea to have a chat with your accountants for the most efficient way to close it. With you receiving a salary in the current tax year, I presume you're a higher rate tax payer already? This would have a bearing on the amount that could be efficiently taken out in the current tax year.

Could be that you keep the company open until you go onto maternity leave, extract as much as you can until get below the £25k as you mention then close. Also depends on when you want the cash.

Alternatively, close it using a liquidator, pay them and take the Entrepreneurs relief.