Accountants Advice: Options to close my unused (2 years) business account with £4500 & LTD company

[adam_london]

Will try to keep it short, but provide as much info as possible.

I have a Limited company which has a business account. The balance in the business account is £4,500 (cash profits left over after taxed in previous years) which came from contracted jobs I have done in the past, but I have had no contracts or income for past 2 years. The business hasn't been making an income

I want to close the business account and the business, and withdraw the cash with minimum tax fines and deductions.

There has been no activity in the account for past 2 years, other than monthly bank fees (£7 per month).

My Accountant is unreliable as he helps then goes mute then asks for statements then goes mute for 3 months, although wants to charge me £600 to close the account, but he has been mute for 4 months, no response to emails, texts, calls .

Can anyone suggest what I can do to close the business bank account (just transfer the money to personal account as dividends for this year?) and then tell HMRC the business account is solvent and close the LTD company?

I have been working in an PAYE job for the past year and was made redundant at the start of Oct 2024, my salary was over £100k PA, not sure if that affects things if I take final dividends, close the bank account and fill out a DS01?

 

[DWS]

Too late now but why have you not taken dividends for the last 2 years to make the most of the tax free allowance?
If you take the dividends this year and you have earnings of £100k then you will be hit with a high rate of tax on them, who submitted your Company accounts for the past 2 years?

 

[adam_london]

My account has a 'dormant' or 'no activity'. but I wasn't advise onthe above.

 

[UK Contractor Accountant]

Would claim it as a distribution on winding up rather than as a Dividend.

 

[adam_london]

Would claim it as a distribution on winding up rather than as a Dividend.

Capital distribution?

 

[UK Contractor Accountant]

Capital distribution?

yep - BADR maybe due (google it)

 

[MyAccountantOnline]

Will try to keep it short, but provide as much info as possible.

I have a Limited company which has a business account. The balance in the business account is £4,500 (cash profits left over after taxed in previous years) which came from contracted jobs I have done in the past, but I have had no contracts or income for past 2 years. The business hasn't been making an income

I want to close the business account and the business, and withdraw the cash with minimum tax fines and deductions.

There has been no activity in the account for past 2 years, other than monthly bank fees (£7 per month).

My Accountant is unreliable as he helps then goes mute then asks for statements then goes mute for 3 months, although wants to charge me £600 to close the account, but he has been mute for 4 months, no response to emails, texts, calls .

Can anyone suggest what I can do to close the business bank account (just transfer the money to personal account as dividends for this year?) and then tell HMRC the business account is solvent and close the LTD company?

I have been working in an PAYE job for the past year and was made redundant at the start of Oct 2024, my salary was over £100k PA, not sure if that affects things if I take final dividends, close the bank account and fill out a DS01?

Does the company have any other assets?

Have all outstanding accounts and tax returns been completed and submitted to HMRC/Companies House?

 

[Baines Watson]

Will try to keep it short, but provide as much info as possible.

I have a Limited company which has a business account. The balance in the business account is £4,500 (cash profits left over after taxed in previous years) which came from contracted jobs I have done in the past, but I have had no contracts or income for past 2 years. The business hasn't been making an income

I want to close the business account and the business, and withdraw the cash with minimum tax fines and deductions.

There has been no activity in the account for past 2 years, other than monthly bank fees (£7 per month).

My Accountant is unreliable as he helps then goes mute then asks for statements then goes mute for 3 months, although wants to charge me £600 to close the account, but he has been mute for 4 months, no response to emails, texts, calls .

Can anyone suggest what I can do to close the business bank account (just transfer the money to personal account as dividends for this year?) and then tell HMRC the business account is solvent and close the LTD company?

I have been working in an PAYE job for the past year and was made redundant at the start of Oct 2024, my salary was over £100k PA, not sure if that affects things if I take final dividends, close the bank account and fill out a DS01?

You can close the company if it's not trading any more by following the voluntary strike off process assuming all the filings for the past two years are up to date with companies house and hmrc.

In terms of the funds remaining in the company, I agree with the other comment above, better to do a capital distribution on winding up instead of claiming as dividends, you should be able to get it all exempted via the CGT allowance.

You annual salary may be over £100k but given that you have been made redundant part way through the fiscal year and also may have received a severance package which will be tax free uptill £30k, your total taxable income for the fiscal year may not exceed the £100k mark for tax purposes.

In terms of the accountant response, not sure what your engagement terms are but if they are not fulfilling their obligations then terminate the engagement and either do this yourself or find another accountant.

 

[UK Contractor Accountant]

up instead of claiming as dividends, you should be able to get it all exempted via the CGT allowance.

How so when the CGT allowance is £3K?

 

[Baines Watson]

How so when the CGT allowance is £3K?

Correct for individual shareholders, however, if owned as a couple then it will extend to £6k.

Not enough details here to determine this is the case or not so my statement should not have been definitive in this context, thanks for pointing that out.

 

[DWS]

Correct for individual shareholders, however, if owned as a couple then it will extend to £6k.

Not enough details here to determine this is the case or not so my statement should not have been definitive in this context, thanks for pointing that out.

I read it as an individual, no mention of a couple, what other details do you need?

 

[Baines Watson]

I read it as an individual, no mention of a couple, what other details do you need?

It can be assumed it is fully owned as a single shareholder based on what the OP wrote but it may not necessarily be the case so worth asking the specific question.

 

[DWS]

It can be assumed it is fully owned as a single shareholder based on what the OP wrote but it may not necessarily be the case so worth asking the specific question.

Apologies I did not realise you had actually asked a specific question it came across as you were basing your answer on your assumptions.

 

[Baines Watson]

Apologies I did not realise you had actually asked a specific question it came across as you were basing your answer on your assumptions.

As I said in my response above to contractor accountant, my answer to OP should not have been definitive without asking the specific question about ownership.

You question following on from that exchange was asking what additional information is needed and that is what I was responding to.

 

[adam_london]

1) I own the company, individual, no couple.
2) No redundancy as I was working as a contractor and was given 1 months notice as agreed in the contract.
Therefore if I transfer the amount into personal account under 'capital distribution' am I due to be taxed? I have to submit my tax returns for the year by Nov 30th, I want to close the company, business account and. transfer all funds to my personal account.

 

[UK Contractor Accountant]

I have been working in an PAYE job for the past year and was made redundant at the start of Oct 2024, my salary was over £100k PA, not sure if that affects things if I take final dividends, close the bank account and fill out a DS01?

trf funds to private bank account as final capital distribution, close bank account & then file DS01.

File final accounts & ct return with HMRC & advise them company is to be closed down by sending them a copy of DS01 form.

The final distribution amount will need to be shown on your 24/25 tax return with BADR claimed.

 

[adam_london]

Do I need an accountant to fill out the above or is it pretty straight forward?

 

[adam_london]

For the final capital distribution, which of the following categories do I put this under in freeagent:

• ‘Sales Refund’
• ‘Payment’
• ‘Bill Payment’
• ‘Transfer to Another Account’
• ‘Money Paid to User’
• ‘Purchase of Capital Asset’
• ‘Purchase of Stock’
• ‘Credit Note Refund’

 

[adam_london]

trf funds to private bank account as final capital distribution, close bank account & then file DS01.

File final accounts & ct return with HMRC & advise them company is to be closed down by sending them a copy of DS01 form.

The final distribution amount will need to be shown on your 24/25 tax return with BADR claimed.