Company inactive - what to do?

[Robbyell]

HI all - hope you can help!

I previously worked as a Finance contractor in the public sector but it isn't a goer for me at the moment. I may use my Ltd in future so don't want to close it down; equally, though, don't want to pay monthly bank charges for nothing.

What options have I got?

Can't imagine any banks will want to take on an effectively inactive company, and doubt I'll be able to achieve lower charges anyway as I'm not a startup. There's around £500 in the account, I've got called up share cap of c£100 and I'll probably be seeking to reclaim a tax loss from HMRC.

Thanks!

[TheCyclingProgrammer]

Assuming that £500 is retained profits and capital, could you pay yourself a £400 dividend and withdraw the remaining £100 as a directors loan and just close the bank account down?

When you start trading again you can re-open a bank account and return the £100.

You'll technically have to pay corporation tax (s455 tax) on the £100 if its still unpaid 9 months after your company year end, but that will only be £20 - surely less than any bank fees - and you'll get that £20 back eventually (the year after you repay the £100).

Or if you want the really simple route - take the £400 dividend if you've still got some of your dividend allowance, close the company down and start a new one when you need it.

[Robbyell]

Wow - great answer. Thanks Cyclingprogrammer.

You're right in that it's cleaner to close down and open a new one if/when I need it: anyone know top of their head what it costs nowadays if I did that myself?

[EinsteinTax]

DS01 costs £10

It costs £10 to file a DS01 form with Companies House to close down the company.

You basically need to close your accounts with all the various HMRC departments, take all the money out of the business bank account and then submit the DS01 form to Companies House.

It's important that you close down the bank account before submitting the DS01 or you may lose all the money through the Bona Vacantia rules

[Fred Bloggs]

Wow - great answer. Thanks Cyclingprogrammer.

You're right in that it's cleaner to close down and open a new one if/when I need it: anyone know top of their head what it costs nowadays if I did that myself?

When I folded/restarted again, 1st Online accountants set me up for nothing including the set up of the FreeAgent accounting system, VAT registration etc..... I called them about 9.30am and by 3.00pm I was fully set up in business. Can't fault them.

[Darren at Fox-Bartfield]

New Company

As Fred says, if a new co is required, simple enough process and many of the accountants on here will include it within the package (including ourselves). The HMRC registrations only take a few days once the formation comes through, had a VAT reg through earlier this month within 4 working days!