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  • FIRST POST
    • ThemeOne
    • By ThemeOne 11th Oct 17, 2:25 PM
    • 1,115Posts
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    ThemeOne
    Should I Wind Up my Company?
    • #1
    • 11th Oct 17, 2:25 PM
    Should I Wind Up my Company? 11th Oct 17 at 2:25 PM
    I have worked for many years via my own limited company but am now thinking of retirement, apart from one small client, whose work is likely to be infrequent.

    There is a fair bit of cash in the company, both in a current account and invested in funds, and my initial thought is to continue paying myself a small salary until the money runs out (this would be quite a few years).

    The advantage to me is this arrangement involves changing nothing, and it leaves the company in existence in case I want to use it for some other kind of venture.

    My question is would some other arrangement be better? Would what I am proposing raise a flag with HMRC, for instance - since I would presumably be returning a loss each year, which I have never done before. Would there be an advantage to winding up the company?
Page 1
    • 00ec25
    • By 00ec25 11th Oct 17, 4:13 PM
    • 5,012 Posts
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    00ec25
    • #2
    • 11th Oct 17, 4:13 PM
    • #2
    • 11th Oct 17, 4:13 PM
    what does your accountant advise?

    running down the balances in a company is a fairly standard option, but there are others..
    https://www.contracteye.co.uk/close-limited-company-options.shtml
    Last edited by 00ec25; 11-10-2017 at 4:16 PM.
    • ThemeOne
    • By ThemeOne 11th Oct 17, 4:43 PM
    • 1,115 Posts
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    ThemeOne
    • #3
    • 11th Oct 17, 4:43 PM
    • #3
    • 11th Oct 17, 4:43 PM
    That's useful thank you - at least it reassures me what I'm thinking of doing is not so unusual.

    I will think about the other options, but leaving things as is does seem easiest and I have no need of the funds beyond the monthly salary drip-feed.
    • bris
    • By bris 11th Oct 17, 8:39 PM
    • 6,925 Posts
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    bris
    • #4
    • 11th Oct 17, 8:39 PM
    • #4
    • 11th Oct 17, 8:39 PM
    Assuming you tax returns are up to date you can just take out the funds as dividends. Speak to your accountant, there are ways to get the money out tax free after winding it up.


    If you take it as a salary you will have to pay tax again as PAYE, why bother as I assume your company has already paid corporation tax.
    • Vectis
    • By Vectis 17th Oct 17, 10:44 AM
    • 455 Posts
    • 550 Thanks
    Vectis
    • #5
    • 17th Oct 17, 10:44 AM
    • #5
    • 17th Oct 17, 10:44 AM
    Not quite the same but a similar position...we changed from Limited Company to sole traders as it simplified everything (you only have to do your self assessment, which you're probably doing anyway, and not bother with filing accounts at Companies House, annual returns or getting involved with pension admin etc).

    If you let the company drift on without much turnover you might find that money left there will get eaten away gradually if you use an accountant for your accounts and, even if you don't, you'll still have to remember to file everything on time. Remember to leave the VAT scheme too if you're part of it.

    We took the cash out via salary, up to the limit, and then as dividends. Obviously this income will go on your self assessment, but then that's it.

    You'll need to inform any clients about your new business status (not that it will make any difference to them) and close any business bank accounts (BEFORE you close the company, otherwise HMRC will take the money from your accounts). Remember to inform clients of your new bank details so they don't try paying into the old account.
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