If you decide to close your company and remove it from the official register, you must follow the formal process of striking off the company. Informing HMRC is a crucial part of this process, as there are tax and administrative implications associated with the closure of a business. In this guide, we’ll walk you through the steps involved in informing HMRC of a company strike off and ensuring that all tax obligations are met.

What Is a Company Strike Off?

A company strike off, also known as a voluntary strike off, is the process of removing a limited company from the Companies House register. Once struck off, the company ceases to exist legally and can no longer trade, own assets, or operate in any capacity. Business owners often choose to strike off a company if it’s no longer trading, or they want to wind up operations for other reasons.

To successfully strike off your company, you must meet certain criteria, including:

• No trading or business activity for at least three months
• No outstanding debts or legal actions
• No ongoing activities like changing the company name

Informing HMRC of the Strike Off

When you decide to strike off your company, informing HMRC is essential because the company will need to settle its final tax obligations, including corporation tax, VAT, and PAYE if applicable. Failing to notify HMRC can lead to delays or penalties. Here’s a step-by-step guide to the process.

1. Cease Trading and Settle Outstanding Liabilities

Before starting the strike off process, make sure your company has stopped trading and has settled all outstanding liabilities. This includes:

• Paying any remaining corporation tax, VAT, or PAYE obligations
• Filing all outstanding tax returns with HMRC
• Ensuring any employee obligations, such as National Insurance contributions, are met

This is crucial because HMRC will want to ensure that all taxes are up to date before the company is officially struck off. If you still owe taxes, the strike off process can be delayed or rejected.

2. File a Final Corporation Tax Return

When you strike off your company, you’ll need to submit a final corporation tax return to HMRC. This is a final statement of your company’s income and tax liabilities up to the date it ceased trading. The return will cover the final trading period and any other relevant activities up to the date of the strike off.

Steps to File a Final Corporation Tax Return:

• Inform HMRC that the company has stopped trading by submitting a CT600 form (corporation tax return).
• On the CT600, indicate that this is your final return by marking the relevant section for company closure.
• Include a cover letter stating that the company is being struck off and this is the last corporation tax return.
• Pay any outstanding corporation tax by the deadline specified by HMRC.

3. Cancel Your VAT Registration (if applicable)

If your company is VAT-registered, you’ll need to deregister for VAT by submitting a VAT 7 form to HMRC. This must be done within 30 days of ceasing business operations.

Steps to Deregister for VAT:

• Complete and submit a VAT 7 form either online or by post.
• Include the effective date of when your company stopped trading.
• Pay any outstanding VAT on the final VAT return.

Once deregistered, you’ll no longer need to file VAT returns or charge VAT on any sales.

4. Notify HMRC of PAYE Cessation (if applicable)

If your company has employees and operates a PAYE (Pay As You Earn) scheme, you must inform HMRC when the company ceases to employ staff. This can be done through your payroll software or by contacting HMRC directly.

Steps to Notify HMRC of PAYE Cessation:

• Submit your final Full Payment Submission (FPS) to HMRC through your payroll software.
• On the FPS, mark that this is the final submission for the company.
• Send a P45 to all employees and inform HMRC that the PAYE scheme is closing.

5. Apply for Company Strike Off

After completing your final tax returns and settling all obligations with HMRC, you can apply to strike off your company by submitting a DS01 form to Companies House. This form officially requests the removal of the company from the register.

Key Steps for DS01 Filing:

• Download the DS01 form from the Companies House website.
• Complete the form, providing details about the company and its directors.
• Ensure all directors sign the form.
• Submit the form to Companies House along with the £10 filing fee.

Once the form is submitted, Companies House will publish a notice in The Gazette announcing the proposed strike off. If no objections are raised within two months, the company will be struck off.

6. Final Confirmation from HMRC

Once your company has been struck off, HMRC will receive a notification from Companies House. However, it’s always a good idea to send a final notification to HMRC as a precaution.

Send a letter to HMRC confirming that the company has been struck off and that no further tax obligations remain. This helps avoid any future tax inquiries or penalties.

How CANGAF Accountants Can Help

Navigating the process of striking off a company can be complex, especially when it comes to ensuring that all tax obligations are properly met. At CANGAF Accountants, we specialize in helping business owners manage the financial and tax implications of company closure. Our expert team can assist you with:

• Filing final corporation tax returns and ensuring compliance with HMRC.
• Managing VAT deregistration and PAYE cessation.
• Advising on the tax implications of company closure to minimize liabilities.
• Ensuring the DS01 form is correctly filed with Companies House.

By working with CANGAF Accountants, you can be confident that the strike-off process will be smooth and efficient, avoiding any complications with HMRC.

Conclusion

Informing HMRC of a company strike off is an essential part of the business closure process. By following the steps outlined in this guide and ensuring that all tax returns and liabilities are settled, you can close your company smoothly and avoid any future complications. For professional guidance on company strike-offs, tax compliance, and more, contact CANGAF Accountants for expert advice and support.

Contact CANGAF Accountants

• Address: 235 Tonge Moor Road, Bolton BL2 2HR
• Email: info@cangafltd.com
• Phone: 01204 859315