Seeking advice on Closure of Dormant Company.

[porkbelly32]

Apologies if this is not the correct sub-forum, I'm just seeking some advice on the best way to handle some loose ends and close my company down for good.

Background and context, I'm the sole director of my Limited Company which has been in dormancy for the past 18 months or so. I'm now in a position to fully close it since I don't envision myself restarting the business.

1. The company has no debt or employees.
2. Still has a couple hundred pounds in the business account in profit.
3. Has not traded or had any transactions on the account for over 18 months.

I almost applied to strike off and dissolve the company via Companies House website, but stopped at the stage where it said all assets would be surrendered to the Crown. Can I just withdraw the remaining hundreds of pounds in the form of trivial benefits/annual "Christmas/Summer" party expenses despite it being in a dormant state?

Thanks in advance!

 

[porkbelly32]

Seems I can't edit my original post, just want to add that I'm not that well versed in doing the books as I've always had an online accountancy to manage all of this, but since I've not had any transactions via the company for such a long time, I thought it'd be easy to do it myself. If not, I appreciate if anyone can recommend a paid service that will handle everything for me properly.

 

[StevensOnln1]

If corporation tax has already been paid on the profits, why not just declare a dividend rather than falsifying business expenses?

 

[porkbelly32]

If corporation tax has already been paid on the profits, why not just declare a dividend rather than falsifying business expenses?

Dividends would be subject to my income tax and have to be declared? I have always been advised that they are legitimate mechanisms to spend company profits and won't need additional declaring as a benefit in kind type of threshold?

 

[Scalloway]

You have an allowance of £500 before tax is payable on dividends.

Tax on dividends

How you're taxed on dividend payments and how your income affects the amount of tax to pay

www.gov.uk

However distributions to shareholders as part of an informal winding-up prior to a company being struck off the Companies Register, are taxed as a capital receipt. The limit of total distributions which can be treated as such is £25,000.

Withdrawal of Extra-Statutory Concession C16 (ESC 16) | Mercer & Hole

The Government has introduced new legislation into the Corporation Tax Acts covering Extra-Statutory Concession C16 (ESC C16) which took effect on 1 March 2012. Previously, with the prior consent of HMRC, distributions to shareholders as part of an informal winding-up prior to a company being...

www.mercerhole.co.uk

 

[porkbelly32]

You have an allowance of £500 before tax is payable on dividends.

However distributions to shareholders as part of an informal winding-up prior to a company being struck off the Companies Register, are taxed as a capital receipt. The limit of total distributions which can be treated as such is £25,000.

Thanks for that, that makes thing more straight forward then, I'll just withdraw them as dividends and leave enough to cover the company closing fee.

Can just about grasp the content in the second link , but seeing as I have a mere sub £500 which was already taxed at a previous stage, I think I'm "safe"!

 

[Porky]

@porkbelly32
Like your pen name
For the minor amount involved here i would just draw it out and apply to dissolve it off at companies house. Really not worth concerning over. It just isn't.