Stop trading as limited company

srcandas

Bit of an odd one but MSE is such a helpful place I thought I'd try.

Basically small (2 man) limited company wants to stop trading 3 months after their usual year end.

Is it possible to do a 15 month financial report and CT600? Thus avoiding two sets of accounts in 3 months.

Presumably one cancels VAT registration from the last day. Is there a way to recover VAT from the final accounts bill? Or is it best to pay an estimate early?

Can't ask the accountant as want to make decisions before he knows and at the moment it is just one possibility.

Many tx for any thoughts

:beer:

Pennywise

You can extend the accounting period at Companies House, but HMRC only accepts a maximum of 12 months for the corporation tax return. So if you have a 15 month period, there'll be two tax returns, normally one for the first 12 months, and then another for the following 3 months.

Strange that you don't want to ask your accountant though? Surely, they're the best people to advise on the procedures and your options?

srcandas

Pennywise wrote: »

You can extend the accounting period at Companies House, but HMRC only accepts a maximum of 12 months for the corporation tax return. So if you have a 15 month period, there'll be two tax returns, normally one for the first 12 months, and then another for the following 3 months.

Strange that you don't want to ask your accountant though? Surely, they're the best people to advise on the procedures and your options?

Pennywise thanks for that. It is how I had originally read it at HMRC but then I saw possible wriggle room. Or I just imagined it.

With only 9 expense transactions, and possibly one sales invoice, in that 3 month period I need to negotiate with the accountant. Although I expect it will make more sense to close end of year.

The accountant thing is complex and unusual so you're right to wonder :beer:

00ec25

when you say "stop trading" do you mean close down the company and liquidate its assets or do you mean no more selling but continue as dormant?

srcandas

00ec25 wrote: »

when you say "stop trading" do you mean close down the company and liquidate its assets or do you mean no more selling but continue as dormant?

The former. I can see no reason why we would reawaken it.

We, my partner and I, have no employees now. And the software we developed to test large software applications we have put in the public domain. It was never valued as an asset.

I am now in Spain and collecting pensions. My partner has a few years to go but can do any work our clients desire as a freelance consultant.

:beer:

00ec25

srcandas wrote: »

The former. I can see no reason why we would reawaken it.

so you would probably go for a strike off then rather than a liquidation

for a strike off the company cannot have traded for at least 3 months
https://www.gov.uk/closing-a-limited-company

presumably the company has money in it which would be payable to you and your partner as shareholders?

https://www.gov.uk/strike-off-your-company-from-companies-register

take note of the process and also how to take money out of the company
https://www.gov.uk/strike-off-your-company-from-companies-register/close-down-your-company

Pennywise

00ec25 wrote: »

so you would probably go for a strike off then rather than a liquidation

Note the £25k limit - if there's cash/assets worth more than £25k you'd need a liquidator and go through a formal liquidation to get preferential capital gains treatment - otherwise it's taxed as if it were a dividend subject to far higher personal tax.

srcandas

Pennywise wrote: »

Note the £25k limit - if there's cash/assets worth more than £25k you'd need a liquidator and go through a formal liquidation to get preferential capital gains treatment - otherwise it's taxed as if it were a dividend subject to far higher personal tax.

00ec25 and pennywise thanks so much for your offerings.

We have already wound down our business such that>

We have £8000 to cash to cover accountant costs
Assets totalling £1200
No other cash
A director owed £8000 (this could go down a little)

I imagined we could sell the assets to the owed director thus assets £0.
We will have a loss this year of a few thousand but paid CT in the previous year. We're talking small amounts but I blieve we can reclaim on tax.

So as you can see nothing worth fighting for.

This is not a sad case by the way. We have enjoyed 27 years of trading, earning a good living, and doing what we wanted. We've travelled the world, given a few people jobs, (up to 4 years ago -our office manager for 12 years). Many happy memories :cool:

But any further thoughts very welcome :beer: