Reply to: Paystream - Company closure

[MB2]

How much money is in the company ? If you are ceasing contracting you could dividend/pension it out over a few years only need to MVL if you have a large amount in my opiinion.

If you haven't paid into a pension for a few years can also catch up previous years.

[Maslins]

they wont be doing an MVL my bank account only has about 5000 they are charging 600 for personal tax form being completed and also personal tax 'planning advise and discussion of options and completion of the capital gains distribution - what would be a reasonable price for this?

i would pay 5550 in tax in january 2020 via dividends declaration
i would pay 3927 in tax in january 2020 via capital gains distribution

If your company bank account only has £5k then I'm intrigued how you're getting the hefty capital gains distribution costing about £4k in tax (probably £50k+ assuming you've got your annual exemption available and will benefit from entrepreneurs relief)? Makes me nervous there's a big director loan that they'll be hoping to clear as part of an MVL? See this thread if so.

Ignoring that, sounds like they've already done the work they were quoting you £600 for...so you may well be stuck with both those bills. I think given how far you are with this you may as well just press ahead with whatever they're recommending.

[new2contract]

Yes...but I don't think the £600 is for an MVL. I think the £600 is basically to establish whether an MVL is worthwhile for you (perhaps checking a handful of other things too, and giving you a glossy report of negligible value). My point is if you don't mind divulging a few things here, the posters on this form can likely do that side for you for free.

EDIT - just seen your follow up. If that's correct, then it's probably not worth it. An MVL will only cost you trivially less than that once all costs have been factored in...or possibly they're including the cost of an MVL before coming to that saving. Unclear.

they wont be doing an MVL my bank account only has about 5000 they are charging 600 for personal tax form being completed and also personal tax 'planning advise and discussion of options and completion of the capital gains distribution - what would be a reasonable price for this?

i would pay 5550 in tax in january 2020 via dividends declaration
i would pay 3927 in tax in january 2020 via capital gains distribution

[Maslins]

But if I go through the dividends way of closure i would have to pay significantly more tax in january 2020 compared to the capital gains method. Sighs not sure what to do this is extortion - how can paystream get away with this for doing nothing

Yes...but I don't think the £600 is for an MVL. I think the £600 is basically to establish whether an MVL is worthwhile for you (perhaps checking a handful of other things too, and giving you a glossy report of negligible value). My point is if you don't mind divulging a few things here, the posters on this form can likely do that side for you for free.

EDIT - just seen your follow up. If that's correct, then it's probably not worth it. An MVL will only cost you trivially less than that once all costs have been factored in...or possibly they're including the cost of an MVL before coming to that saving. Unclear.

[new2contract]

On that basis I defo wouldn't pay the extra £600! Like you suggest to me that sounds very much like a standard thing they should do as part of their normal cost. The £300 you've already paid...well, there is a bit of extra work involved in closing, and it's not extortionate.

In terms of possible options for tax purposes, what's the closing net asset position of your company (ie total assets less total liabilities)? Also, how bothered are you about having that money very soon? Your main options will be possibly making a big pension contribution, then deciding between strike off or MVL.

they have said my total savings using the capital gains route would be 1700

[new2contract]

On that basis I defo wouldn't pay the extra £600! Like you suggest to me that sounds very much like a standard thing they should do as part of their normal cost. The £300 you've already paid...well, there is a bit of extra work involved in closing, and it's not extortionate.

In terms of possible options for tax purposes, what's the closing net asset position of your company (ie total assets less total liabilities)? Also, how bothered are you about having that money very soon? Your main options will be possibly making a big pension contribution, then deciding between strike off or MVL.

But if I go through the dividends way of closure i would have to pay significantly more tax in january 2020 compared to the capital gains method. Sighs not sure what to do this is extortion - how can paystream get away with this for doing nothing

[Maslins]

On that basis I defo wouldn't pay the extra £600! Like you suggest to me that sounds very much like a standard thing they should do as part of their normal cost. The £300 you've already paid...well, there is a bit of extra work involved in closing, and it's not extortionate.

In terms of possible options for tax purposes, what's the closing net asset position of your company (ie total assets less total liabilities)? Also, how bothered are you about having that money very soon? Your main options will be possibly making a big pension contribution, then deciding between strike off or MVL.

[new2contract]

Paystream the scam

I have already paid 300 for them to close my company

Then suddenly they came to call me and tell me by the way the most tax efficent way to close your company will be an extra 600 pounds.

BREAKDOWN OF THE COSTS for £300:
[*]SUBMISSION OF FINAL PAYE RETURN AND ISSUANE OF P45[*]CLOSURE OF CORP TAX AND CLOSURE OF PAYE SCHEME[*]DEREGISTRATION FROM VAT SCHEME (IM NOT REGISTERED)[*]PREPARATION OF CESSATION ACCOUNTS AND FINAL CORP TAX RETURNS[*]SUBMISSION OF A FINAL RTI PAYROLL RETURN[*]PREPARATION AND SUBMISSION TO HMRC OF AN EXPENSE AND BENEFIT RETURN[*]PREPERATION OF MINUTES OF MEETING[*]FILING OF CESSATION ACCOUNTS AND CORP TAX[*]SUBMISSION OF FINAL VAT (IM NOT REGISTERED FOR VAT)[*]SUBMISSION OF ACCOUNTS AND DISCLOSURE TO COMPANIES HOUSE[*]PERSONAL TAX REVIEW BUT ONLY FOR 18/19 YEAR





extra £600 BREAKDOWN:
[*]IDENTIFICATION AND REVIEW OF POTENTIAL PERSONAL TAX SAVINGS TO DETERMINE THE MOST EFFICIENT EXIT ROUTE (aren't thy meant to do this anyway as they have charged me £180 a month for a year)[*]Preparation of tax planning calculations[*]liaising with accounts team[*]personal tax year return for the year including capital gains computations (normally costing 200 +VAT)

[craigy1874]

Ask Paystream for a breakdown of the £600 and the £300 and then post it here. Us accountants can then tell you if the work they are doing is commensurate with the fees they are charging.

It's all guesswork otherwise.

[LaurieDriver]

Companies House

You can close your Ltd company down yourself. All the relevant info is on the companies house website, or call them, they will tell you which forms you must fill in.

Its what i did 4 months ago, once you notify Companies house your closing your Ltd you have to wait, i think its 6 weeks before its final because they post the closure in a London paper. Do your self assessment as normal declaring your dividend and wages as normal. Pay your corporation tax as normal.

PAYSTREAM are trying to rob as much money as possible because they are loosing your income going forward.

I was contracting at end clients using my limited company but I have now changed jobs and I'm being paid under PAYE through the recruitment company. My limited company was managed by PAYSTREAM (they charged me £180 a month for them doing very little )I was told it costs £300 to close my limited company.

As if that is not bad enough, I have now been told that I have to pay a further £600 to close my limited company in the most tax efficient way declaring funds as capital gains tax as opposed to the declaring as dividends way which would be covered by the 300. (Is this normal?)

They keep saying there would be additional work required in relation to capital gains tax and that at least they will sort out my personal tax form by the time i need to pay personal tax liability in January 2020. I still do not see what they are doing that justifies an additional £600 - please urgently advise? No way can this be normal to try and extort a total of £900 just to close a limited company that has been open for less than a year with no VAT registration?

How much has everyone had to pay to close their limited company? is what paystream charging the norm?

[eazy]

Reserves <25K

As long as the amount paid out to shareholders is under £25k, there is no need to report to HMRC and can just go ahead. So the order should be something like this:

•Cease trading
•Do final tax return, including showing the money paid out to shareholders to clear everything off the company books
•Strike off company

To apply to have a solvent company struck off the Register of Companies, Form DS01 must be completed and signed by a majority of the directors. This type of closure will only be permitted if the company can satisfy the following conditions:
•It has paid all of its debts.
•It has not traded or sold stock within the past 3 months.
•The company name has not changed within the last three months.
•It is not threatened with liquidation.
•It does not have any existing agreements with creditors, such as Compulsory Voluntary Arrangements (CVAs).

Form DS01 can be downloaded from the Companies House website and delivered online or by post. A £10 fee will also be required. Companies House will send a letter to your registered office address to confirm acceptance of the application. The striking-off request will then be published in the Gazette in London, Edinburgh or Belfast.
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The additional £600 maybe is preparation of accounts and other admin costs associated with company closure which are not part of the monthly fee.

[northernladuk]

Sounds even more odd than the "I want an app for my business" brigade.
"Ok, what do you want it to do?"
"I don't know, I just hear every business should have an app, please build me one."

We did have the we page equivalent of that asked in here recently to be fair.

[Maslins]

I did once have someone contact me to form a company "as a thirtieth birthday present to myself, as I've always wanted one"

Sounds even more odd than the "I want an app for my business" brigade.
"Ok, what do you want it to do?"
"I don't know, I just hear every business should have an app, please build me one."

[Jessica@WhiteFieldTax]

To my mind it's too cheap and easy to set up a Ltd Co, means people don't really think it through, then they get upset when they have to pay a professional to unpick it all. Like a puppy, a Ltd Co isn't just for Christmas.

I did once have someone contact me to form a company "as a thirtieth birthday present to myself, as I've always wanted one"

It was an odd conversation.

[Maslins]

Well it doesn't, I'm responding very specifically to Maslin's point as evidenced by the quote.

Yes, possibly it was an unnecessary tangent from me. I was just thinking in terms of possible reasons for "closing costs". Perhaps it is actually an additional charge for closing (some accountants do levy these, many don't). But perhaps it's more that they had only been a client of the accountancy firm for a very short period before deciding to close. Hence it's more analogous to the fact the "monthly fee" is really 1/12 of the annual fee. I was just trying to understand the OP's situation a bit better.