Dormant or Close LTD company

[bootham]

Hi,

Apology if this has been discussed. With market dead and doesn't appear picking for quite sometime, I am thinking to close or dormant my ltd company. Accountant says they I can make it dormant so that I can resume anytime in future, they will charge half accountancy fees to run it. If I close now then I can't reopen another for sometime.

Thanks.

[NotAllThere]

is your company name recognised by clients? If not, screw it. Close the company and when you need a new one, create it. The only other reason you might want to keep it is to preserve continuity if, e.g. you're applying for a mortgage.

But if you decide to make it dormant - ditch the accountant. The necessary work for a dormant company is negligible. It doesn't need an accountant.

[northernladuk]

is your company name recognised by clients? If not, screw it. Close the company and when you need a new one, create it. The only other reason you might want to keep it is to preserve continuity if, e.g. you're applying for a mortgage.

But if you decide to make it dormant - ditch the accountant. The necessary work for a dormant company is negligible. It doesn't need an accountant.

What NAT says. I assume you don't have large reserves so just a matter of divi'ing the last of the money out so no issues about re-opening another. If you've got over£25k in it then its a different kettle of fish.

There is big difference between dormant and just leaving it do nothing so make sure you are using the correct terminology. There is a process to make it dormant and rules around it. Just not using it is different.

[TheDogsNads]

Hi,

Apology if this has been discussed. With market dead and doesn't appear picking for quite sometime, I am thinking to close or dormant my ltd company. Accountant says they I can make it dormant so that I can resume anytime in future, they will charge half accountancy fees to run it. If I close now then I can't reopen another for sometime.

Thanks.

I think you're thinking about a 'phoenix' situation of closing one company then opening another doing the same type of work.

This only applies if you're trying to avoid paying debts, scamming people or out smart HMRC.

There's nothing to stop you closing a company because work has dried up then starting a new one because you've found work.

[Hobosapien]

I think you're thinking about a 'phoenix' situation of closing one company then opening another doing the same type of work.

This only applies if you're trying to avoid paying debts, scamming people or out smart HMRC.

There's nothing to stop you closing a company because work has dried up then starting a new one because you've found work.

Also applies if using ER to get money out of the company at reduced tax rate.

[bootham]

thanks for replying.

I have little over £60K in Business account. My current mortgage deal runs for another 3 years.

I am keen to close LTD company as I do not see many clients giving contract Outside IR35 after Apr 2021.

[Eirikur]

Just close, make sure the bankaccount is empty before the company gets stricken off, because if you don't the money will go to HM government

[DimPrawn]

I would close. Investigating a dormant company is easy for HMRC, even going back 5 or 6 years. Investigating a closed company takes a lot more effort. Seeing HMRC like easy targets, I know which route I would go for.

[mogga71]

Just close, make sure the bankaccount is empty before the company gets stricken off, because if you don't the money will go to HM government

If he has got £60k in the Company and is going to close it, then he is likely going to end up using an MVL. I think the MVL takes care of the money and therefore not possible to leave it all in Bank Account ... I believe.

[northernladuk]

Correct.