Quickly closing down a UK company
June 17, 2010 5:27 AM Subscribe
YouAreNotMyAccountantFilter: I own a tiny UK Limited Liability Company. It has done quite badly and made about 1000 pounds in the last year. My accountant has just informed me that he wants 900 of those to do last year's accounts and HMRC/Company House filing.
At this point, I am sick of being held to ransom by incomprehensible paperwork I need an expert to write for me. Any advice on how to close down the company? Is there any realistic hope for an educated but non-accountant individual to correctly fill out HMRC and Companies House forms without accidentally committing a crime? The 1000 pounds in the company accounts are expendable, I just want to not have to use my own (nonexistent) funds to keep the company on life support.
At this point, I am sick of being held to ransom by incomprehensible paperwork I need an expert to write for me. Any advice on how to close down the company? Is there any realistic hope for an educated but non-accountant individual to correctly fill out HMRC and Companies House forms without accidentally committing a crime? The 1000 pounds in the company accounts are expendable, I just want to not have to use my own (nonexistent) funds to keep the company on life support.
According to my ex-wife, a book-keeper would do what you want doing far cheaper and somewhat better than an accountant.
Why yes, she is, as it happens.
posted by Phanx at 5:49 AM on June 17, 2010
Why yes, she is, as it happens.
posted by Phanx at 5:49 AM on June 17, 2010
This is precisely what Business Link is there for. Have a look at their website. This should be straightforward for you to do solo.
posted by dmt at 6:25 AM on June 17, 2010
posted by dmt at 6:25 AM on June 17, 2010
Do you owe the accountant 900? If so then you have to pay him for his services. However if he wants you to pay him 900 for this year... tell him to take a hike and use one of the suggestions above.
posted by Mastercheddaar at 6:42 AM on June 17, 2010
posted by Mastercheddaar at 6:42 AM on June 17, 2010
Sorry it's not gone well.
You can strike off or dissolve your company. But near in mind that to do this, you need to file a final set of accounts, so this doesn't avoid your need to get the accounts done.
I too run a tiny limited company. I too pay about £900 for accounts + filing each year, so you're not getting ripped off there.
(apologies if this is obvious) The fees have nothing to do with the company's prosperity - they cover a minimal number of set actions the accountants have to take.
In terms of your accounts + filing, I don't think a book-keeper can do this if you're a limited company. Yes, they can do your accounts in the sense of doing the leg-work to calculate your sales, profit, loss etc. and to prepare your accounts, and yes, they will be cheaper. But the accountant's role is to check those prepared books to ensure that they're correct and to prepare the companies house paperwork. By choosing a limited company, you've chosen to need proper accountants, I'm afraid, at least for now.
posted by dowcrag at 7:09 AM on June 17, 2010
You can strike off or dissolve your company. But near in mind that to do this, you need to file a final set of accounts, so this doesn't avoid your need to get the accounts done.
I too run a tiny limited company. I too pay about £900 for accounts + filing each year, so you're not getting ripped off there.
(apologies if this is obvious) The fees have nothing to do with the company's prosperity - they cover a minimal number of set actions the accountants have to take.
In terms of your accounts + filing, I don't think a book-keeper can do this if you're a limited company. Yes, they can do your accounts in the sense of doing the leg-work to calculate your sales, profit, loss etc. and to prepare your accounts, and yes, they will be cheaper. But the accountant's role is to check those prepared books to ensure that they're correct and to prepare the companies house paperwork. By choosing a limited company, you've chosen to need proper accountants, I'm afraid, at least for now.
posted by dowcrag at 7:09 AM on June 17, 2010
Response by poster: My state of shock comes mostly because he did the previous year's accounts for about 300 pounds, so a sudden tripling of the fee was not something I had budgeted for.
I've spoken to HMRC, and they seemed quite confident that for a company with such a simple financial state as mine, the accounts are doable by an amateur. Also, usefully, I have copies of the paperwork filed for 2008/2009, so I can use this to pattern the 2009/2010 submissions on. Finally, I have a year of time, so I think I will be able to submit the current and final files myself.
posted by Zarkonnen at 8:26 AM on June 17, 2010
I've spoken to HMRC, and they seemed quite confident that for a company with such a simple financial state as mine, the accounts are doable by an amateur. Also, usefully, I have copies of the paperwork filed for 2008/2009, so I can use this to pattern the 2009/2010 submissions on. Finally, I have a year of time, so I think I will be able to submit the current and final files myself.
posted by Zarkonnen at 8:26 AM on June 17, 2010
But the accountant's role is to check those prepared books to ensure that they're correct and to prepare the companies house paperwork. By choosing a limited company, you've chosen to need proper accountants, I'm afraid, at least for now.
That's not really true. The Companies Act requires an audit above certain size limits, but it does not require an accountant's report. Unless the company requires an audit there is no reason why directors cannot prepare accounts and file them (stating that they are unaudited accounts) without involving an accountant - assuming they know how to do the accounts and what paperwork to complete.
If your company is below the audit thresholds what your accountant does is prepare accounts for you, in line with financial reporting standards and company law requirements, and then they like to issue an accountant's report, which is an extra page in the accounts. There is no legal requirement for this but it gives a little bit of assurance to somebody reading the accounts, that a knowledgeable party was involved in the process.
Which is why small companies are normally well advised to let an accountant prepare their accounts. Companies House can reject accounts which do not comply with financial reporting requirements and HMRC likes to challenge tax returns submitted based on these accounts...but there's nothing stopping directors of small companies from doing it all themselves if they know how and don't want help in dealing with the tax man.
posted by koahiatamadl at 9:56 AM on June 17, 2010
That's not really true. The Companies Act requires an audit above certain size limits, but it does not require an accountant's report. Unless the company requires an audit there is no reason why directors cannot prepare accounts and file them (stating that they are unaudited accounts) without involving an accountant - assuming they know how to do the accounts and what paperwork to complete.
If your company is below the audit thresholds what your accountant does is prepare accounts for you, in line with financial reporting standards and company law requirements, and then they like to issue an accountant's report, which is an extra page in the accounts. There is no legal requirement for this but it gives a little bit of assurance to somebody reading the accounts, that a knowledgeable party was involved in the process.
Which is why small companies are normally well advised to let an accountant prepare their accounts. Companies House can reject accounts which do not comply with financial reporting requirements and HMRC likes to challenge tax returns submitted based on these accounts...but there's nothing stopping directors of small companies from doing it all themselves if they know how and don't want help in dealing with the tax man.
posted by koahiatamadl at 9:56 AM on June 17, 2010
The reason for the increase is that your accountant was giving you a reduced rate last year, expecting to have you as a revenue generating client for several years to come. As he now knows you won't be needing him in the future he's looking to charge you his normal rate including whatever profit margin he normally tries to make on a simple set of accounts.
posted by koahiatamadl at 10:15 AM on June 17, 2010
posted by koahiatamadl at 10:15 AM on June 17, 2010
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I think Companies House could probably answer this for you, or at least direct you to someone that can.
posted by EndsOfInvention at 5:31 AM on June 17, 2010