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Closing a Company Bank Account

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MartynC27
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Closing a Company Bank Account

#281089

Postby MartynC27 » January 30th, 2020, 10:18 am

I am 66 and have been contracting for various agencies via a limited company (PSC) for five years. I am the only director and my wife & I are the only shareholders. I am the only person on the payroll. As I have not worked for a while there have been no payments into my Business account for the past 4 months however there have been some card payments and withdrawals from my business account every month.
The Buisness is solvent with a surplus balance in the account and no debts (in fact I am making a company pension payment this month to reduce the Balance to circa £16K). The 'Company year' accounting period is at the end of February.

If I get my accountant to produce the final unaudited accounts at the end of February, I assume this will take a couple of weeks, then I pay the Corporation Tax due and any dividends due to my wife and I, say in March. Can I then can apply for the company to be struck off as a solvent company and pay the £10 fee to Companies House ?

I understand the rules for dissolution of a company state that 'there should be no transactions within the 3 months prior to dissolution'.

Does this rule mean I can't close the company bank account for 3 months after I have made the last payments out for final Corporation tax, Companies House Fee and final Dividend payments to shareholders (ie so this will be June at the earliest) ?

I am asking this because my Bank is charging monthly fees.


Thanks

PinkDalek
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Re: Closing a Company Bank Account

#281103

Postby PinkDalek » January 30th, 2020, 11:26 am

Briefly and in haste but re:

A.
MartynC27 wrote:I understand the rules for dissolution of a company state that 'there should be no transactions within the 3 months prior to dissolution'.


The very brief https://www.gov.uk/strike-off-your-company-from-companies-register includes:

You can close down your limited company by getting it ‘struck off’ the Companies Register, but only if it:

hasn’t traded or sold off any stock in the last 3 months ...


Where did you find your no transactions?

More generally, it seems you are willing to pay out any balances as potentially taxable dividend income. We know nothing of your personal tax affairs to know if you'll be paying any Income Tax on these further dividends.

As per https://www.gov.uk/closing-a-limited-company there is an alternative namely a members’ voluntary liquidation but that comes at a cost. The impact of the latter is that the liquidation distributions should be treated as capital distributions and chargeable via the CGT regime, subject to the availability of the each shareholder's CGT annual exempt amount (currently £12,000).

That having been said, given the amounts involved would be less than £25,000, the voluntary striking off procedure may still be undertaken to ensure the proceeds are treated as capital (should that be of any use).

See for example https://www.begbies-traynorgroup.com/articles/tax/esc-c16-what-is-it-and-what-does-it-mean.

Beware of Bona Vacantia - mentioned in a similar article here https://www.rossmartin.co.uk/companies/ceasing-trading/112-striking-off-a-company.

Your accountant should be able to advise - assuming they are competent and not mere bookkeepers - you probably need to obtain HMRC clearance to strike off or at least you used to some years back.

Further info here https://www.gov.uk/strike-off-your-company-from-companies-register/close-down-your-company being the page following the one I referenced at the top. It probably repeats what I've linked to at Begbies and Ross Martin.

B.
Does this rule mean I can't close the company bank account for 3 months ...


The closure of the bank account itself is different matter. You should get the balances to nil and speak to them once you've got further down the striking off road. In our situation we managed to get them to cease further bank charges once they new the route we were taking.

PinkDalek
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Re: Closing a Company Bank Account

#281117

Postby PinkDalek » January 30th, 2020, 12:15 pm

Knew for new above!

MartynC27
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Re: Closing a Company Bank Account

#281199

Postby MartynC27 » January 30th, 2020, 5:01 pm

PinkDalek wrote:Where did you find your no transactions?


Thankyou for the detailed reply -

The 'no transactions' came from the FAQs section of a so called 'Company Dissolution Service' website which I now know that I do not need to use !

I will make a SIPP pension payment to ensure there is less than £25,000 in the Company when the Final accounts are done by my accountant so I can make use of the Tax free Dividend Allowance and £12,000 Capital Gains Allowance for two shareholders.


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