Winding up a small limited company

standupnow

My business partner and I have decided after 27 years running our small limited company (us and 1 employee) that business is getting gradually harder and harder for little or no reward, that we want to retire.  The business is not saleable, relies pretty much purely on goodwill so it will be just a matter of closing it down and making our one employee redundant, but not sure what we have to do re Companies House / Accounts - do we have to file accounts up to the last day of trading etc. There isn't a lot of money left in the business, but we have just enough to clear all our debts if we don't have to pay a large accountants bill for preparing closing accounts ?
In terms of records, which we would normally be expected to keep for 6 years what would we need to do with those, neither of us really have space to store them at home ?
Many thanks.

DE_612183

Companies house will tell you how to close down, I believe there is a combined process with HMRC.
Pay off your final debts and distribute any money left over as a dividend.
Yes - you'll need to produce a final set of accounts.
Yes - you'll have to keep the records - can you not scan the paperwork?

tacpot12

You would normally be expected to keep all your accounting records for the last six tax years including the year in which the business was closed down. You need to keep the documents for six years. You also need to keep all the paperwork to back these up, i.e. invoices and receipts. It would also be sensible to keep any contracts.

With some organisation, you can problably get it down to the size of one filing cabinet drawer. Pack all the paperwork into a couple of 50 litre airtight boxes and it will be fine for six years. These should slide under a bed, or go in the loft. (I've had six boxes of books stored in my damp cellar in dust-proof, but not airtight boxes and they are still fine). In theory, you can throw each year of paperwork when it is older than 7 years, but it's easier to plan to keep everything for together. 

Mark the date when they can all be disposed off on the lids of the boxes. This will be 6th April 2030 if the business is closed in the current tax year.

uknick

Think carefully about what date you want to close it down.  If possible make it within the 12 months from your last set of accounts.  For example, if your year end is 31 March 2025, close it down before 31 March 2025.  This way you only have to do one tax return.  We just had a client close down his business but told us about it a couple of weeks into the new accounting year.  Therefore he needed to pay for another tax return and therefore a new set of accounts.

Also, if you're VAT registered don't forget about when you have to make the final VAT return.  Again, if you leave too late in the financial year this may mean you have to start a new year to ensure the VAT payment/refund can be made from your bank account.

Finally, as has been said above, before you actually tell Companies House you want to strike off the company make absolutely sure all balance sheet balances are zero and all corporation tax returns have been lodged and paid/refunded.  You can't go back later and make/receive payments as the company is no longer a legal entity without a massive load of work to do by asking Companies House to resurrect the company.