Company cease trading

**SarahL2012** · 20 August 2012, 08:14

Originally posted by smalldog View Post

Hi, I've been forced into a perm role so am going to cease trading. This has been a rapid change of circumstances and I've recently paid my last lot of ct as just filed. As its a rapid change there is no provision for future accountants fees or ct for any final accounts.

I've done some research and most posts say you must submit a final set of accounts etc, but I don't have the company funds to pay accountants and there are no reserves to pay any ct that could be owing as its something I financially plan and put aside a few months from when it's due. I've had to borrow from my wife's company just to pay the final vat return as this fell same time as ct. I've borrowed to ensure all vat owing is paid and that the bank is not owed so bank accounts not in the red, so that's all clear and closed off.

All that would be owed would be ct for this years accounts which will now not be produced or filed and would be due in July 2013. In which case do I actually owe anything?

I assume I just don't file an annual return and let the firm be struck off? obviously if I've had to borrow to pay my ct and vat for this year there is not going to be funds for final accounts or to appoint an ip to be wound up.

I've got a call with my accountant tomorrow but assume he will just say I have to submit final accounts which I'm not prepared to fund personally.

You should only have taken dividends out of the company if you had sufficient DISTRIBUTABLE reserves to do so - ie after providing for all tax liabilities, accounting costs etc. So you need to leave enough reserves in the company to ensure that you can pay your remaining tax liabilities for the period to July 2012 plus fees to close the company down.

**NickWallace87** · 20 August 2012, 08:36

Have to agree with SarahL2012. Why take the funds when they are not due to you?

Posts like this infuriate me! Surely your accountant should have been advising you of what VAT and CT to keep aside? The VAT is charged on top of your rate and should just be put aside and paid over, it isn't your money to use so why have you had to borrow this and create another liability for your company. What is going to happen to the money that your company owes to your wife's company?

You will still be required to file your return, submit your account and pay any CT owed. This is how it works with a Limitd company as I am sure you are aware!

**Andrew at Boox** · 20 August 2012, 09:01

Get your accountant to give you an idea of your final CT liability and make sure you've claimed all business related expenses. Knowing your CT exposure will be a good start to addressing it.

**BolshieBastard** · 20 August 2012, 09:35

Smalldog, sorry to hear this. Obviously other posters dont know your situation with the BN66 worry.

TBH I'd advise you have a word with your accountant rather than just let the co be struck off. Im not sure if there may be future ramifications for you if \ when you decide to return to contracting with a new ltd if you go down this route.

It may be better to keep the co open as long as you can then use some of your own funds to meet the company's obligations. I pressume seeing as you have emptied the co, these would be shown as directors loan to you so, you may be able to re introduced this money 'as and wehn.'

Good luck and chin up.

**smalldog** · 20 August 2012, 10:54

Hi BB, yep as you well know this seems the most appropriate route for me at present, bit of protection against potential bankruptcy should the hammer fall with BN66 as you obviously cant be a director, and ive been cornered slightly with a small person on the way.

Gotta love the attitude of some on the board, hindsight is wonderful thing isnt it. Ive got 12 months to formulate a strategy I guess and to come up with the CT etc so time on my side. I actually think Im being responsible even thinking about it at this stage!

**NotAllThere** · 20 August 2012, 12:26

No. The responsible thing is to not take non-distributable money out of the company. What you're doing in trying to fix it before it gets even more serious, is dealing with that irresponsibility in a responsible fashion.

Basic rule of running a company - don't take money out that isn't profit.

**northernladuk** · 20 August 2012, 12:33

Originally posted by NotAllThere View Post

No. The responsible thing is to not take non-distributable money out of the company. What you're doing in trying to fix it before it gets even more serious, is dealing with that irresponsibility in a responsible fashion.

Basic rule of running a company - don't take money out that isn't profit.

+1 to this but I believe there is a long history here and not every choice was the op's... but bearing NAT's comment are you putting your wifes company in the same position by leaving it exposed or is this money it can afford. I wouldn't say loaning a chunk of money into a situation where it might not get it back in good time would be responsible? Having one company in a potentially illegal situation is bad enough, 2 would just be suicidal?

I don't know the in's and out's but just something that struck me while reading the OP post.

**VectraMan** · 20 August 2012, 12:34

So your company year is end of July 2012? You need to do accounts and a CT return for the last year you've traded in, but if that's up to July 2012 and you've done the accounts/CT return for 11/12 and haven't traded since, you should now be able to get out of it relatively painlessly. Deregister from VAT and PAYE. Get the form from companies house (is that DS01 - can't remember). Send a copy to HMRC, and give a copy to your bank when you close the account.

**smalldog** · 20 August 2012, 13:22

Originally posted by VectraMan View Post

So your company year is end of July 2012? You need to do accounts and a CT return for the last year you've traded in, but if that's up to July 2012 and you've done the accounts/CT return for 11/12 and haven't traded since, you should now be able to get out of it relatively painlessly. Deregister from VAT and PAYE. Get the form from companies house (is that DS01 - can't remember). Send a copy to HMRC, and give a copy to your bank when you close the account.

Hi VM, no company year end is October 2011 so will have accounts to prep for next July. Basically I will have drawn cash that is not profit so becomes a loan which personally I could be held accountable to pay by HMRC, but thats only if I actually publish accounts. Its an interesting one really.

Northernlad, I have the cash personally to cover any potential liability subject to the outcome of BN66, and yes the loan from my wife will be paid back from my funds. Its a question of whether I will need too pay any CT really. My accountants view is that Ive overdrawn the company, he thinks it would probably be too small to be put through for HMRC to issue a winding up order etc, but if HMRC did want to do an audit they would say I should pay back the overdrawn amount as it wasnt mine.

Fair enough really and without being flamed I just wanted to get some views as I didnt really understand if CT would be owing as that can only be owing based on accounts being submitted showing a profit, so if Im not how does that work.

Which I never actually got an answer too, I got the responsibility, and how to run a Ltd company gong bashed. Im not trying to get out of paying money, Im trying to understand the system and consequences.

Thanks for the telling off teacher, but can anyone who has been in the same position share their experiences? I cant be the only person in the world who was merrily running the co. drew dividends only to find the income suddenly cut short.

Company cease trading