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

[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.

[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

[radish2008]

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

[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.

[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?

[VectraMan]

Last time I closed a company it cost me £0.

[dmo]

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?

[VectraMan]

I went perm nearly 2 years ago, but kept the company going. Deregister from PAYE and VAT, and it's not all that hard to do the end of year stuff yourself (especially if it's all zero).
I have a trickle of Plan B money coming in, so I've kept the bank account active, but that costs me. I think if you go dormant, you're not allowed even that, and you still have to submit something. It didn't seem worth the effort to me; either keep it going properly, or close it down.

I left after 18 months of course. But TBH I'm not all that confident of finding contract work and may well end up permie again, just hopefully a better role this time. Remember if you do what I've done (resign from a job) you won't get JSA or anything for 6 months.

[kingcook]

So, looking into the abyss a bit. Been on the bench for 2 months and have another 4 if I squeeze a bit.

Just wondering what my options are ? Would I have to close the business if I went perm ?

I'm planning to google etc and email my accountant but just wanted a quick opinion from anyone ?

With such a small warchest, i'd consider claiming JSA (or whatever it is these days).

You'll have to get your company to lay you off and not pay you a salary. You allowed upto £16K in savings last time I checked.

[Boo]

You don't have to go perm just because you can't find a contract. There is always the somewhat more palatable alternative known as "suicide".

And if you are stuck in the misery of permiedom then you can keep your company running by letting it go "dormant" which reduces the number of annual forms to be filled in to just one (IIUC).

Hth,

Boo

[BolshieBastard]

So, looking into the abyss a bit. Been on the bench for 2 months and have another 4 if I squeeze a bit.

Just wondering what my options are ? Would I have to close the business if I went perm ?

I'm planning to google etc and email my accountant but just wanted a quick opinion from anyone ?

Keep your limited open for the time being.

If you are going to go this route (more and more people including me are having to consider it), make sure you dont leave looking for perm until the last moment.

Im under no illusion, there's going to be some hesitation about companies taking on ex contractors as perms. So, invariably, there will be a lead lag time just as in contracting, to finding and getting an offer on a permie role

In other words, you should start looking at permie roles by the start of month 4 and hope a contract comes along instead!

[radish2008]

Thanks. Tax is all safe. So far

[Clare@InTouch]

You can keep the company open if you like, you'll just incur professional fees in getting the accounts prepared and you'll still need to file a personal tax return. You could always keep it open for a few months to make sure you like permidom, then close it. We find a lot of people go perm and then return to contracting within a few months!

If you have any retained profits then closure might be a way to withdraw them at a lower tax rate.

[stek]

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

No. Why would you?

Make sure you've got your CT though otherwise you're in the shiitt...

[radish2008]

So, looking into the abyss a bit. Been on the bench for 2 months and have another 4 if I squeeze a bit.

Just wondering what my options are ? Would I have to close the business if I went perm ?

I'm planning to google etc and email my accountant but just wanted a quick opinion from anyone ?