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We have received a large number of queries from contractors in relation to the closing of limited companies due to the fact their chosen service provider is in the process of being dissolved or whereby the contractor’s provider is based offshore and hasn’t been paying employer's National Insurance contributions.
Each individual situation is different however if you decide you no longer need your limited company, Transition will review the most cost-efficient and compliant way to shut down your limited company to ensure you’re not hit with a tax bill when you return to New Zealand or Australia.
In some instances contractors have been quoted in excess of £650 to close down their existing limited company!
Assuming the company is not in financial difficulty, a contractor’s limited company that has been used only to provide the services of the contractor can be struck off if, in the previous three months it has not:
• Traded; the contractor has issued no invoices and has only paid creditors
• Changed its name
• Engaged in any activity except those required to strike off the company.
If the above conditions are satisfied, Transition can start the process of closing the company and assist with the following:
• Informing HMRC (for corporation tax, payroll and VAT purposes)
• Company accounts prepared to the final date of trading
• Company accounts submitted to the HMRC with a Company Tax Return
• Inspector of Taxes for the company payroll informed, HMRC issue P35
• Ensure the balance of PAYE and NI Contributions are paid
• Contractor to inform HMRC that the company has ceased trading
• Deregistered for VAT along with VAT return
• Informing any co-directors and shareholders in writing (DS01 form)
• Corporation tax, payroll and VAT are all different departments therefore all three must be informed
• Final payments and closing the bank account
• Review remaining assets in the business and pay final dividends
• Review Capital Gains Tax (CGT) liabilities arising from final payments
• Form 652a is submitted to the Registrar at Companies House
• Note any cash or assets left in the business after dissolution automatically goes to the crown
Assuming there are no complications, which will be the case for most contractors who are sole directors and shareholders of their own limited company, the Registrar at Companies House will advertise the dissolution of the company in the London Gazette.
Transition exists to provide Kiwis and Aussies with a professional service at an affordable price, avoiding any surprise tax bills when you return home! The majority of limited companies have been closed for roughly £400, simply e-mail email@example.com for a quote.
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