If you have decided you wish to close down your limited company, firstly think about whether you will need to use it again. It is inefficient to open and close limited companies as and when you need them, so consider making the company dormant instead.
This is simple to do, it is a case of filing dormant company accounts with Companies House, and completing the Annual Return once a year. Please contact Mazuma if you would like us to prepare your dormant accounts for you.
If however you are certain you will not use your limited company again, these are the steps your need to follow:
Prepare the Final Accounts
Final trading accounts must be prepared covering the period from the last annual accounts to the final date of trading. These must be submitted to HMRC, together with the corporation tax computation and Company Tax Return (form CT600) as normal.
HMRC should be advised at time of submission that these are the final trading accounts and that the company will shortly be dissolved. They will issue their final assessment, and the final balance of corporation tax should be paid without delay, in order to avoid HMRC objecting to the striking off.
Close Down Company With HMRC Departments
Following the settlement of the final corporation tax liability, HMRC should be asked to close down the corporation tax scheme they have for the company.
The payroll Inspector of Taxes should be advised that the company has ceased trading and will shortly be dissolved. They will issue a final Employer's Annual Return (form P35), which should be completed without delay. Any final balance of PAYE/NIC should be paid, following which HMRC should be requested to close down the payroll scheme.
The VAT department at HMRC should be advised that the company has ceased trading and should be deregistered for VAT (if applicable). A Form VAT 7 will need to be completed, for more information on this please click here.
Application To Companies House
After the company has ceased trading for three months, a Companies House form 652a should be completed and forwarded to Companies House, together with a cheque for £10 for their dissolution fee. To download this form, please click here.
Companies House will then advertise the company in the London Gazette, and following a period of up to nine months, the company will be dissolved, following which it ceases to exist. Care should be taken to ensure that on the date of dissolution, there is no money in the company bank account or other assets held in the company's name, since bank accounts may be frozen and the sums transferred to the Treasury Solicitor acting for the Crown (if there are creditors).
A final dividend/capital distribution should be calculated for final distribution to the shareholders, which should be paid after all other transactions have been completed, e.g. final payments of corporation tax, VAT, PAYE, etc., but prior to the date of dissolution by Companies House.