Final Accounts and Dormancy Question

[James Parnell]

Hello,

I have paid my accountant to prepare and submit the final accounts for a failed business after 3 months of trading, the company was registered voluntarily for VAT also so this is currently being de-registered.

The final significant payment that went out of the bank account was for the accountant fees 2 weeks ago this is also the date I told my accountant that the company stopped trading as I believed no payments would come out after this. However this was followed by a bank charge a few days ago.

There is a little bit of money left in the bank account which I kept in there for any tax, corp tax or VAT that might need to be paid to IR and there should be some left over which will be paid out to myself - Will this be done before the final accounts are submitted? Because I am concerned these payments will incur bank charges which will mean that the company will become active again, is this true? How do accountants go about this and should I be concerned? And what is the proper course of action?

I appreciate anyone's help with this, thank you.

 

[Scalloway]

I wouldn't consider payments such as bank charges as being trading. What I would consider trading would be selling goods.

 

[James Parnell]

I wouldn't consider payments such as bank charges as being trading. What I would consider trading would be selling goods.

Thank you! However, I read this on informdirect.co.uk "In addition to bank charges, earning interest on a bank account will cause a company to lose dormant status since this too will be considered a significant accounting transaction"

My concern is that after any tax or vat is paid out to IR and the rest of the money in the bank account is paid out to the shareholders, there would be unaccounted bank fees after these transactions - wouldn't I have to account for these fees? And wouldn't these fees cause the dormant company to become active. Am I missing something? I'm really sorry to bother you with this.

 

[Scalloway]

That article refers to a company being dormant for the point of view of having no accounting transactions from year to year, peerhaps just existing as a shell so that nobody can register a similar name, or maybe it holds intellectual property being exploited by another entity.

https://www.informdirect.co.uk/business-finance/dormant-company-definition-and-requirements/

You speak about preparing final accounts. If all you are going to settle company liabilities and incur bank charges before having the company dissolved that is merely a case of putting company affairs in order before it gets a decent burial. As long as you settle the companies liabilities HMRC won't be worried and I am sure Companies House won't be either.