HMRC blocking Companies House closing company

anniem

I have a client who wants to close their company.

Forms submitted to Companies House.

They have been advised by Companies House that HMRC have blocked the closure.

There is an outstanding CT liability due in about November, this is the only reason I can think they may block.

Can anyone shed any light on this for me, please?

Monsoon

Has the CT been paid?
Were HMRC informed and told everything was up to date?
Or is it a case of an informal insolvency and the CT isn't going to get paid?

Guest

Yes and correctly so, taxes need to be paid before closing company. Who signed the DS01, they may have an issue as they have signed the disclaimer that no liabilities exist, which turns out to be un true.
If you wish to remove the company the tax should have been paid early and then sign DS01.

Monsoon

DS01 is not signed to say there are no liabilities.
A DS01 can be signed where liabilities exist, as long as a copy of the form is sent to all creditors.
This is a change from the old voluntary dissolution form.

Normally if a company is going to be dissolved via DS01, you would pay all taxes early and tell HMRC what is happening as then they shouldn't object.

If the taxes are not going to get paid due to insolvency, you can either instruct an IP, or you write to all creditors stating the company is insolvent, doesn't have the funds to pay its creditors or pay for an IP and that form DS01 will be submitted in due course. The creditors (including HMRC, who rank equally with other creditors) can then either apply to wind up the company themselves (which will cost them) or let the dissolution go through.

If they object, as has happened here, the objection remains on the file for 6 months, afetr which point CoHo try stiking off again; if there are no objections it goes through, and if there are objections we go round again. It goes round and round until the creditor gives up or the tax is paid.

If the tax can't be paid then it gets stuck in a loop if the creditor keeps objecting.

As long as the director has acted correctly, there is nothing to worry about even if this happens. They could always resign...

Newbie

assuming DS01 route I would get affairs up to date (register & HMRC) then send a copy of the form to HMRC to remove block.

Guest

Sending a copy of DS01 won’t necessarily remove objection. HMRC will have objected to removal due to unpaid tax. Pay the tax this will. Still feel that the signing of the form without settling liabilities and assuming that copies not gone to creditors (HMRC) is an issue, look at the penalties! The directors are trying to wind up an insolvent company on the face of it.

Monsoon

It's only an issue if copies haven't gone to creditors.
Quite possibly a copy did get sent which is why HMRC objected (they have been known to miss lots of companies that do owe tax).
We don't acutally know the circs.

anniem

Thank you all.

Will get on to HMRC and ensure that all facts are accurately recorded.

Not insolvent, just a straightforward one - CT liability needs to be paid!

Monsoon

Yep - pay the CT before filing the DS01!
Glad it's straightforward

groundy

Make sure you remove any remaining funds from company bank accounts before submitting DS01 or you could find the accounts being frozen and money being lost.

Monsoon

groundy wrote: »

Make sure you remove any remaining funds from company bank accounts before submitting DS01 or you could find the accounts being frozen and money being lost.

Yep!
Also - if this happens - the CT can't get paid (though would end up in the gov't's coffers in any event).
This is another main reason for paying the CT early.