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George29297059
- Original Poster
- #1
Hello,
Last year (in August 2018) I dissolved my small limited company and Iʼm wondering if I need to mention anything to do with that company on my next self-assessment tax return (for the 18/19 tax year)?
Some background: From 2013 to 2018 I had a limited company with a friend. As individuals we are each self-employed sole traders working independently of one another. Heʼs a freelance musician and Iʼm a freelance project manager. Our self-employed work has nothing to do with the limited company we started (totally different fields). We maintained our self-employed work (which was each our only income) while also being directors of the company we formed. As you can tell, the company was a side project for us...neither of us wanted to risk leaving our current self-employed work in case the company failed, which it did.
Anyway, in 2013 we decided to give a try at a small startup we had always talked about forming “one day.” So we took the plunge and formed the limited company. It went well the first two years, but the final three we needed to use a lot of our own savings to fund the company to keep it going. We never took funding or loans from any bank or other investors. My friend and I were also the companyʼs only directors.
After five years of struggles, we gave up on our small startup and decided to close it—we had enough loses and didnʼt want to put more money into the company to keep it going. It was dissolved in August 2018. The company was dissolved with about £80,000 in debt outstanding. However, all that debt was what me and my friend (both the only directors of the company) each put into the company over the years to get it going and sustain it. Thankfully, the company didnʼt owe anyone else any money when it closed besides us, its directors, so we had no problem when we filed the final company accounts and tax return and then the DS01 and successfully dissolved the company. We used an accountant all the years we had the company to do all our CT returns and accounts and she help us with the closing.
Which brings me to today: Later this year Iʼll be filing my finaly 2018/19 personal SA tax return—the first SA return I need to file after the closing of the company. Given that, do I need to mention anything on my personal 18/19 tax return regarding the company we dissolved? Neither me or the other director ever took a salary or dividends from the company. We also never received any interest from the money we loaned the company.
I also know I cannot offset the money I lost on my company against my other self-employment income as a sole trader (which isnʼt related at all to the company), so Iʼm wondering if I need to even mention the loss of the money I invested in my company anywhere on my SA return? Obviously, given the money I lost in the company and with a move back to my home country and twins on the way, finances are tight for me right now, which is why Iʼm doing my own SA this year. Iʼm just here to see if anyone could give me free advice on whether I need to mention anything with my closed company on my 18/19 tax return.
To recap:
I just want to know if I legally need to report anything about my company's dissolution and the money owed to me on the final SA tax return (for 18/19) I need to file in the UK. Or can I just go ahead and file my SA as normal--that is income and deductions for my self-employed role as a freelance project manager only?
Thanks so much for any advice!
Last year (in August 2018) I dissolved my small limited company and Iʼm wondering if I need to mention anything to do with that company on my next self-assessment tax return (for the 18/19 tax year)?
Some background: From 2013 to 2018 I had a limited company with a friend. As individuals we are each self-employed sole traders working independently of one another. Heʼs a freelance musician and Iʼm a freelance project manager. Our self-employed work has nothing to do with the limited company we started (totally different fields). We maintained our self-employed work (which was each our only income) while also being directors of the company we formed. As you can tell, the company was a side project for us...neither of us wanted to risk leaving our current self-employed work in case the company failed, which it did.
Anyway, in 2013 we decided to give a try at a small startup we had always talked about forming “one day.” So we took the plunge and formed the limited company. It went well the first two years, but the final three we needed to use a lot of our own savings to fund the company to keep it going. We never took funding or loans from any bank or other investors. My friend and I were also the companyʼs only directors.
After five years of struggles, we gave up on our small startup and decided to close it—we had enough loses and didnʼt want to put more money into the company to keep it going. It was dissolved in August 2018. The company was dissolved with about £80,000 in debt outstanding. However, all that debt was what me and my friend (both the only directors of the company) each put into the company over the years to get it going and sustain it. Thankfully, the company didnʼt owe anyone else any money when it closed besides us, its directors, so we had no problem when we filed the final company accounts and tax return and then the DS01 and successfully dissolved the company. We used an accountant all the years we had the company to do all our CT returns and accounts and she help us with the closing.
Which brings me to today: Later this year Iʼll be filing my finaly 2018/19 personal SA tax return—the first SA return I need to file after the closing of the company. Given that, do I need to mention anything on my personal 18/19 tax return regarding the company we dissolved? Neither me or the other director ever took a salary or dividends from the company. We also never received any interest from the money we loaned the company.
I also know I cannot offset the money I lost on my company against my other self-employment income as a sole trader (which isnʼt related at all to the company), so Iʼm wondering if I need to even mention the loss of the money I invested in my company anywhere on my SA return? Obviously, given the money I lost in the company and with a move back to my home country and twins on the way, finances are tight for me right now, which is why Iʼm doing my own SA this year. Iʼm just here to see if anyone could give me free advice on whether I need to mention anything with my closed company on my 18/19 tax return.
To recap:
- The actual company was dissolved successfully last August 2018.
- Before it was dissolved our regular accountant filed our final accounts and Corporation tax return.
- HMRC did not object to our DS01 form and the company was dissolved without problem in August 2018.
- At the time of dissolution, the company owed £80,000 to each of the two directors and founders. This is money we loaned the company over the five years it operated. The company had no other debt to any other party. This debt was about £43, 000 owed to me and £37,000 owed to my friend.
- This money was never paid back to us before the company closed because the company (ie: we) had no money left.
- Are there any tax/reporting implications for the money we lost that we NEED to report on our upcoming SA return for the 18/19 tax return?
I just want to know if I legally need to report anything about my company's dissolution and the money owed to me on the final SA tax return (for 18/19) I need to file in the UK. Or can I just go ahead and file my SA as normal--that is income and deductions for my self-employed role as a freelance project manager only?
Thanks so much for any advice!
