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Put my company on hold

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    Put my company on hold

    Hello everyone,

    I hope you could help me on this. I was out contracting for 18 months, then COVID hits. So I decide go back to permanent for now, however I don’t want to close my company but keep it as inactive. My accountant company want £35 + VAT a month to maintain my company, which I think is too expensive. I asked them to help calculate the tax I have to pay to HMRC before I close the account with them but they refused to help. Would someone point me to a good options, as I have very little knowledge about accounting.


    Kind Regards

    #2
    I suggest that you stick with your current accountants for now (i.e. keep paying their fees until you're square with HMRC), then transfer to another accountant. I'm with Crunch, and in May 2019 they said that it would cost £75/year or £6.50/month for a dormant company (+VAT); they might have changed their prices in the past year, but £35/month definitely seems excessive!

    I don't know who you're with now, but presumably they have some option for you to export all your historical records in a standard format so that you can import them elsewhere?

    Comment


      #3
      Thank you

      Originally posted by hobnob View Post
      I suggest that you stick with your current accountants for now (i.e. keep paying their fees until you're square with HMRC), then transfer to another accountant. I'm with Crunch, and in May 2019 they said that it would cost £75/year or £6.50/month for a dormant company (+VAT); they might have changed their prices in the past year, but £35/month definitely seems excessive!

      I don't know who you're with now, but presumably they have some option for you to export all your historical records in a standard format so that you can import them elsewhere?
      Thank you so much for your advice. I am with a firm called Churchill Knight. They let me exports all payslip and documents to PDF. They give me an option to move to another for £200. I guess I will go over to Crunch after paying all VAT and Corporation Tax.

      Comment


        #4
        Thank you

        Thank you for you advice. I am with a firm called Churchill Knight. They do give me an option to export documents to PDF. As you advice, I think I will move to Crunch after I have paid all my taxes.

        Comment


          #5
          If you have very little knowledge of accounting then what do you base your decision that 35 quid a month is too much?

          And if know know so little surely any amount of money is worth it.

          How much work would you give your client for £35 a month?
          'CUK forum personality of 2011 - Winner - Yes really!!!!

          Comment


            #6
            Originally posted by hobnob View Post
            I suggest that you stick with your current accountants for now (i.e. keep paying their fees until you're square with HMRC), then transfer to another accountant. I'm with Crunch, and in May 2019 they said that it would cost £75/year or £6.50/month for a dormant company (+VAT); they might have changed their prices in the past year, but £35/month definitely seems excessive!

            I don't know who you're with now, but presumably they have some option for you to export all your historical records in a standard format so that you can import them elsewhere?
            A dormant company is different to a company that has no revenue or expenses.
            See You Next Tuesday

            Comment


              #7
              Originally posted by Lance View Post
              A dormant company is different to a company that has no revenue or expenses.
              This.

              If you want to keep your company fully ticking over for what's anticipated to be a brief stint between contracts, then don't expect accountancy fees to plummet. Payroll will still likely require filing every month, VAT every quarter, accounts/CT return/SA return every year, and still a cost of your bookkeeping software, answering the inevitable queries you'll have from time to time even where employed elsewhere. If your accountant is offering to do all this for £35+VAT/month, then in my opinion that is a bargain, not expensive at all.

              If your company is fully dormant, de-registered for all the main taxes etc, then different story. Here it just needs to file annual accounts with no income/expenditure going through it. This is a very modest task. £35+VAT/month would be slightly expensive for this, but getting your company into/out of that state is a fair bit of work.

              However, getting to dormant stage requires 90% of the faff of closing the company, and isn't viable for a contractor having a period of maybe 6 months without work. Our view is proper dormancy is of no use to a contractor. Either keep the company ticking over fully (so you can revert back to using it at short notice, but expect to pay non trivial accountancy fees even while you're not invoicing), or close it.

              In my opinion this is perhaps one of the things most misunderstood by Ltd Co contractors. There is no cheap/easy way to "pause" your company if you have a break of a few months between contracts.

              Comment


                #8
                Originally posted by Maslins View Post
                This.

                If you want to keep your company fully ticking over for what's anticipated to be a brief stint between contracts, then don't expect accountancy fees to plummet. Payroll will still likely require filing every month, VAT every quarter, accounts/CT return/SA return every year, and still a cost of your bookkeeping software, answering the inevitable queries you'll have from time to time even where employed elsewhere. If your accountant is offering to do all this for £35+VAT/month, then in my opinion that is a bargain, not expensive at all.

                If your company is fully dormant, de-registered for all the main taxes etc, then different story. Here it just needs to file annual accounts with no income/expenditure going through it. This is a very modest task. £35+VAT/month would be slightly expensive for this, but getting your company into/out of that state is a fair bit of work.

                However, getting to dormant stage requires 90% of the faff of closing the company, and isn't viable for a contractor having a period of maybe 6 months without work. Our view is proper dormancy is of no use to a contractor. Either keep the company ticking over fully (so you can revert back to using it at short notice, but expect to pay non trivial accountancy fees even while you're not invoicing), or close it.

                In my opinion this is perhaps one of the things most misunderstood by Ltd Co contractors. There is no cheap/easy way to "pause" your company if you have a break of a few months between contracts.
                I think putting my company into dormant stage is good for now, because with the current situation I dont think i will go back to contracting for 18 months. Thank you very much for all your comments

                Comment


                  #9
                  Originally posted by van pham View Post
                  I think putting my company into dormant stage is good for now, because with the current situation I dont think i will go back to contracting for 18 months. Thank you very much for all your comments
                  ... but, if you're going to do it for 18 months, why not make it 24 months, close it down completely via MVL and take the entrepreneurs' relief?

                  Comment

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