What is my accountant smoking?

[NadJ]

Before I call him and tell him he needs to read emails properly and answer me accurately, can anyone here take a guess at what he might have been thinking with the below response (see email chain too)?


Hi xxx

You need to wait until the C.Tax is paid. HMRC will not allow you to close down the company.

Kind regards

xxx

________________________________________
From: xxx
Sent: 21 November 2011 09:41
To: accountant
Subject: Winding up of xxx Ltd
Importance: High

Dear xxx,

Please could you commence the procedure to have xxx Ltd dissolved with final official trading day being 25th Nov 2011. I can confirm that I have not traded in the last 4 months. I have already received my accounts for financial year 2010-2011 but am just waiting for the bill from HMRC so I can make payment. No one has taken any salary since 1st September of this year too.

Please advise if there is anything I need to do from my side.


Thanks and regards,

xxx

[Craig@Clarity]

What he's trying to say is that if you apply for your company to be officially struck off the companies house register by submitting a DS01 form at companies house, they will advertise your company for striking off in the legal gazette.

This allows a 3 month window for any creditors to object to the striking off application at companies house. The main creditor of your company I would assume is HMRC. If you owe them money (CT) then they will object to the striking off which means you have to settle the tax and reapply for the striking off again which takes another 3 months for anyone else who fancies objecting.

I'm guessing he's advising you to make sure you pay off all taxes before submitting the DS01 form to companies house.

[xoggoth]

Have a search on CUK for procedures re closing company.

[Greg@CapitalCity]

Yep, two things I can think of;
(1) Striking the company off Companies House as Craig says;
(2) Or maybe you want to use the ESC C16 concession on closing, which won't be approved until all outstanding Corp Tax payments have been made;

[Signo_cypher]

What he's trying to say is that if you apply for your company to be officially struck off the companies house register by submitting a DS01 form at companies house, they will advertise your company for striking off in the legal gazette.

This allows a 3 month window for any creditors to object to the striking off application at companies house. The main creditor of your company I would assume is HMRC. If you owe them money (CT) then they will object to the striking off which means you have to settle the tax and reapply for the striking off again which takes another 3 months for anyone else who fancies objecting.

I'm guessing he's advising you to make sure you pay off all taxes before submitting the DS01 form to companies house.

Once a company is dissolved can HMRC come after you retrospectively if they find you have 'incorrectly' paid CT or VAT?

[Craig@Clarity]

Once a company is dissolved can HMRC come after you retrospectively if they find you have 'incorrectly' paid CT or VAT?

They can if they make a discovery which means the company will be reinstated so that any CT that is paid can be allocated to an account on their systems. You'd then have to apply for the DS01 route all over again. Fun times

[PAH]

I once (about 10 years ago) closed a ltd company with outstanding corp tax. HMRC never batted an eye though the amount was trivial (under 10k). I just filled in the companies house form, closed my bank account, and waited.

The account had been run down to empty by then so the company was in effect insolvent, so nothing for HMRC to recover as it was a limited liability company and I did nothing wrong of any significance, so they didn't bother chasing me the director for the money personally.

[centurian]

Basically you have to wait until you receive the CT bill before you can pay them - in order to make sure that they don't simply knock back the paperwork at the first hurdle to shut up shop.

[NadJ]

Thanks.

It's this simple statement I was looking for from my own accountant and despite several emails after the above, I'm no closer to getting this statement from the guy.

(Why not pick up the phone and call you might say? Well I'm making it a habit not to as last year they screwed up which cost me. It all came down to he said she said, so I no longer bother with the phone.)

I'd be grateful if someone can help me further. I've read some basic FAQs but have not had my questions answered. Basically, I've been trading under this Ltd since April 2010 and have not traded since May/June 2011. I have enough funds in the company bank account to pay off my tax obligations. Annual accounts were prepared in September 2011 in order to aid a mortgage application, so when can I expect to receive the corp tax bill from HMRC? Why can't I pay up in advance? Why must I keep the Ltd up and running, living with the admin headache and paying my accountant for nothing? It just doesn't make sense. I've taken up a new perm position abroad and really don't need the Ltd company anymore.

Finally, what happens for the the period April 2011 till now. Surely, the accounts for that period need to be prepared too, then what happens, I wait another year for a corp tax bill?

Sorry if I'm being thick. I don't see an exit path at all and am extremely confused.

Thanks

Basically you have to wait until you receive the CT bill before you can pay them - in order to make sure that they don't simply knock back the paperwork at the first hurdle to shut up shop.

[Clare@InTouch]

Thanks.

It's this simple statement I was looking for from my own accountant and despite several emails after the above, I'm no closer to getting this statement from the guy.

(Why not pick up the phone and call you might say? Well I'm making it a habit not to as last year they screwed up which cost me. It all came down to he said she said, so I no longer bother with the phone.)

I'd be grateful if someone can help me further. I've read some basic FAQs but have not had my questions answered. Basically, I've been trading under this Ltd since April 2010 and have not traded since May/June 2011. I have enough funds in the company bank account to pay off my tax obligations. Annual accounts were prepared in September 2011 in order to aid a mortgage application, so when can I expect to receive the corp tax bill from HMRC? Why can't I pay up in advance? Why must I keep the Ltd up and running, living with the admin headache and paying my accountant for nothing? It just doesn't make sense. I've taken up a new perm position abroad and really don't need the Ltd company anymore.

Finally, what happens for the the period April 2011 till now. Surely, the accounts for that period need to be prepared too, then what happens, I wait another year for a corp tax bill?

Sorry if I'm being thick. I don't see an exit path at all and am extremely confused.

Thanks

If you started in April 2010 then your accounts should go up to April 2011. Your CT is due 9 months after this, but you can pay it early if you want to if your accounts have been done. Your accountant, or HMRC if you call them, will be able to give you the payment reference to use. HMRC pay interest at 0.5% if you pay early. When your accountant files the annual accounts with HMRC they (HMRC) should then send you a statement for the CT, so check if he's filed them for you.

You will need closure accounts prepared which will cover 01 May 2011 until the date you close the bank account. You'll need to de-register for VAT and PAYE, close the bank and ensure all taxes are paid and clear (there will be more CT, but you can pay it early so it doesn't delay the closure). Your accountant should be able to quote you a one off fee for this work, and any monthly fee should cease (or should have ceased when you went perm). As a guide, I'd say around £300 for closure is normal. After the final accounts are filed with Companies House they will advertise the closure for three months in the London Gazette, then dissolve the company providing no one objects (which is why it's important to clear taxes first, or HMRC will object and delay the whole process).