How do I close my company down?
It is so easy to set up a company these days. Hop onto the Companies House website, fill in a few online forms and pay your £50 and half an hour later you're a company director with all the responsibilities that entails. If you use a company that sets things up for you, you may also end up unnecessarily registered for PAYE and VAT, as well as the set-up costing you more!
Once you have a company there is a fair bit of admin required to keep it operating within the law, which you can find out about here. If you are running a company, I would strongly urge you to enlist the help of a qualified accountant. You may even decide subsequently that the company route is not for you. The trouble is, it's a much lengthier process to get rid of your company if you subsequently realise you don't actually need it.
One option is to make the company dormant. This drastically reduces the amount of administration required to keep the company going. So long as you agree with HMRC that corporation tax returns are not required, all you need to submit is a dormant set of accounts annually (which can be completed via the Companies House website) and an annual confirmation statement as well as the annual fee of £34.
The other alternative is that you can apply to have your company struck off, it takes up to 6 months altogether!All the background info on striking off is here.
Steps to striking off your company
The first thing to do is to call HMRC Corporation Tax helpline. You will need your company UTR number to hand before they’ll speak to you. Explain that you plan to strike off your company. Find out whether they need you to submit accounts or a tax return before striking off the company and if so, to which date. Make sure you deregister for VAT if you are VAT registered.
You can’t strike off a company if it has traded at any time in the previous 3 months. If it has, you will have to wait for 3 months to pass before you can apply to strike it off.
Depending on the results above, you can apply for strike off without too much fuss. You can apply to access to the online form here (it costs £44). You will also need to write to HMRC and tell them officially that you are striking off the company (although they may be happy with a verbal notification if you call them). If there are any other interested parties you should write and tell them as well.
Once you submit the form it takes about another 2-3 months to go through. It will appear on your company’s page on the Companies House website first and then will be advertised in the Edinburgh (or London for an English company) Gazette. If nobody objects to the strike off, roughly 2 months after it appears in the Gazette, the strike off will be completed.
So, there you go, half an hour to set up and up to 6 months to close it down! It can be tricky to know which order to do things in as it all needs to happen at around the same time. Please get in touch if you need help striking off your company, and don’t forget to register for self-assessment instead if you are setting up a sole trade instead!
