ltd company winding up

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shelleym
shelleym Registered Posts: 31 Regular contributor ⭐
in General accounting discussion
Hi All

I have a client who wishes to wind up his company his year end is 31/3/17 (tomorrow) I still need to prepare the accounts for this period although he is asking me if he should withdraw all the money from the business bank account and close the account then pay HMRC from his personal account. I dont think he should do this until the winding up stage but i thought i would ask on here to see if anyone else has experience of this prior to advising him. any advise on company wind up would be greatly appreciated.

Shelley

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  • TreadStone
    TreadStone Registered Posts: 280 Epic contributor 🐘
    edited March 2017
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    You don't give enough detail. Assuming no other assets other than cash at bank, what sort of sums are we talking here ? £500, £5000, £50,000 ?
  • Bertie
    Bertie Registered Posts: 376
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    Is the Director a shareholder? The only shareholder?

    Any debts?

    Be aware that if it is processed in an order other than the correct one, your Director / shareholder could be faced with an instance of Bona Vacantia - which would obviously create all types of head (heart) ache!

    Definitely don't pull the plug tomorrow, not if you're performing research the day previous.

  • shelleym
    shelleym Registered Posts: 31 Regular contributor ⭐
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    Thanks for the advise
  • shelleym
    shelleym Registered Posts: 31 Regular contributor ⭐
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    Hi sorry my message sent too early the director is the only shareholder, there is no creditors/ debtors. I am proposing to complete the accounts then wait 3 months before starting the strike off procedure.
  • MarieNoelle
    MarieNoelle Registered, Moderator Posts: 1,368
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    TreadStone said:

    You don't give enough detail. Assuming no other assets other than cash at bank, what sort of sums are we talking here ? £500, £5000, £50,000 ?

    Hi @shelleym you haven't answered this question, it will dictate whether capital treatment applies. Also what kind of company are we talking about? This could be important for availability of ER.
  • shelleym
    shelleym Registered Posts: 31 Regular contributor ⭐
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    Hi I have not started the accounts prep yet but I assume the bank will have between 25-40k on completion he is a nurse contractor and didn't take salary this year and is going to take dividends
  • MarieNoelle
    MarieNoelle Registered, Moderator Posts: 1,368
    edited March 2017
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    Mickdundee said:

    Capital treatment could apply, regardless of the value. The only difference is whether or not an MVL is required to achieve it.

    Indeed.
    shelleym said:

    Hi I have not started the accounts prep yet but I assume the bank will have between 25-40k on completion he is a nurse contractor and didn't take salary this year and is going to take dividends

    If they have no other income you may wish to declare a salary before the year end to reduce any CT liability. This is assuming there is a PAYE scheme in place (although a salary under the LEL would still be better than none).

    The CT will have to be settled before the process of winding up starts.
    Declaring dividends after the intention of winding up is taken may be inefficient.

    Edit: have you considered IR35 aspects?

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