There are so many filing and payment dates its hard to keep track of them and if you are an accountant the problem is multiplied by the number of clients.
We use inform direct for all the companies we work with, its a brilliant system that monitors everything for you and helps you produce the paperwork needed.
If close the business and you apply Entrepreneurs Relief the you will pay 10% tax = £8,000
You will also get your CGT allowance of £11k deducted first.
Without Entrepreneurs Relief the tax would 20% or even more if the distribution was via dividends or salary. For unincorporated businesses the tax could be 20%, 40% or 45%!
What are the rules for ending a business?
The business has ceased.
The assets were in use at the time of cessation.
The business was owned for 1 year by the individual prior to cessation.
The assets were disposed of within 3 years of cessation.
The assets are not held as investments.
However, if you do the same thing within 2 years HMRC may consider that you are only doing this to gain a tax advantage and it could then be treated as income.
A limited company is an organisation that you can set up to run your business – it’s responsible in its own right for everything it does and its finances are separate to your personal finances.
A demerger is a series of transactions which have the effect and purpose of dividing the trading activities carried on by a single company or group of companies between two or more companies or groups of companies. CTA10/S1075 and TCGA92/S192 provide special tax treatment if certain conditions are met. Companies may seek advance clearance under CTA10/S1091 that proposed transactions will be an exempt demerger. CTM17200 onwards gives further guidance on the action to be taken by local offices in dealing with demergers.
On the 21st February 2012, the European Union defined a new category of company, the ‘micro-entity’. Micro-entities are very small limited liability companies and qualifying partnerships.
Micro companies are those not exceeding two out of three of:
Balance sheet total: £289,415 (€350,000)
Net turnover: £578,830 (€700,000)
Average number of employees during the financial year: 10 (or fewer)
Subject to certain conditions, the Micros Directive permits Member States to relieve micro-entities, from the obligations to:
present “prepayments and accrued income” and “accruals and deferred income”
recognise certain types of “prepayments and accrued income” and “accruals and deferred income”
draw up notes to the accounts
prepare an annual report
publish annual accounts provided the financial data information contained in balance sheet items is filed with a designated competent authority.
The Government is seeking to make changes to the Companies Act 2006, and to the accounting regulations made under that Act and under EU law to implement the EU Directive 2012/6/EU of the European Parliament and of the Council (“the Micros Directive”). It would also make comparable changes to the accounting framework for Limited Liability Partnerships.
The ICAEW believes the lack of transparency and dearth of financial data would lead to more rejections of credit to these smaller organisations.
“We have a number of concerns about the suggested changes, as they may result in less transparency and less useful financial information. This, in turn, can over time have a negative impact on market confidence and on micro businesses’ ability to access finance, at least at the margins,” says Dr Nigel Sleigh-Johnson, head of the ICAEW’s Financial Reporting Faculty.
