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LTD Company Closure - Reserves

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    LTD Company Closure - Reserves

    Hi guys, long time lurker, first time poster here.

    I am in the process of closing my company via informal (voluntary) strike-off.

    I unfortunately have the *extremely* incompetent team at Clearsky managing this, so would really appreciate some guidance.

    I filed my latest company accounts at the end of February. In the current 20/21 tax year, I have taken two dividends, paid the monthly accountancy fee to Clearsky, and a final closure fee to them as well (£750!). This left under £25,000 in my business bank account, which I transferred to my personal account in two transactions, the intention being that they would be treated as capital gains.

    Now I have just received an email from the Clearsky team saying that the reserves are greater than £25,000 and I would have to take a greater amount as dividends to reduce it to below that level.

    So, to my question, which is quite basic: how are company reserves calculated in a case like this? Are they simply what is in your business bank account (minus any creditors, plus any expected income - which in this case is nil)? Or is it something else?

    Struggling to understand why they are saying my reserves are greater than £25,000 so would very much appreciate your guidance so I can have a conversation with them from a well-informed place.

    Thanks

    #2
    Your company reserves would be whatever is on the bottom of your company balance sheet. Your bank balance is not going to tell the whole story. A company's assets can include retained profits from previous years, capital assets, shareholder funds and then the balance of any current assets and liabilities for the current year, amongst other things.

    Comment


      #3
      Originally posted by TheCyclingProgrammer View Post
      Your company reserves would be whatever is on the bottom of your company balance sheet. Your bank balance is not going to tell the whole story. A company's assets can include retained profits from previous years, capital assets, shareholder funds and then the balance of any current assets and liabilities for the current year, amongst other things.
      Thanks for this, makes complete sense.

      In fact, I have a very simple set of accounts so there are no capital assets and all liabilities/creditors have long been settled. I am the only director / employee / shareholder.

      Essentially, I have only kept the company open since February on the off chance that I might contract again, and I have since decided that I do not have any plans to, so I should close it down.

      I assume things like the accountancy fees I have been paying come act to reduce my company reserves. Is that the right way of thinking about it?

      Many thanks

      Comment


        #4
        Originally posted by zackzzz View Post
        Thanks for this, makes complete sense.

        In fact, I have a very simple set of accounts so there are no capital assets and all liabilities/creditors have long been settled. I am the only director / employee / shareholder.

        Essentially, I have only kept the company open since February on the off chance that I might contract again, and I have since decided that I do not have any plans to, so I should close it down.

        I assume things like the accountancy fees I have been paying come act to reduce my company reserves. Is that the right way of thinking about it?

        Many thanks
        Ask them for a breakdown of exactly what they believe you have and why they think it's over 25k and then go through it with them.
        'CUK forum personality of 2011 - Winner - Yes really!!!!

        Comment


          #5
          Originally posted by northernladuk View Post
          Ask them for a breakdown of exactly what they believe you have and why they think it's over 25k and then go through it with them.
          May well be something like undeclared dividends being classified as a directors loan or something like that

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