Charge and Mortgage Forms

Charge and mortgage forms to register the security given for your loan or borrowings. This is compulsory for limited company incorporated in England and Wales.

How to register a charge or a mortgage

Firstly, you must download the latest version of the relevant Companies House form to register your mortgage or a charge. You may find the form reference in the table along with the purpose of the form.

Go to GOV.UK website to download the latest form. Alternatively, you may type the form reference on google. For example, MR01. choose the link with the MR01 in PDF format.

Concurrently, your company must register the security give on loan using within 21 days.

Companies House forms

Form referencePurpose of filing
MR01Register particulars of a charge.
MR02Particulars of a charge subject to which property of undertaking has been acquired.
MR03Particulars for the registration of a charge to secure a series of debentures
MR04Register a statement of satisfaction in full or part of a charge
MR04 continuation pageRegister a statement of satisfaction in full or part of charge continuation page to provide a description of instrument and short particulars of the property or undertaking charged.
MR05Statement that part or the whole of the property charged (a) has been released from the charge (b) no longer forms part of the company’s property
MR05 continuation pageStatement that part or the whole of the property charged (a) has been released from the charge (b) no longer forms part of the company’s property continuation page to provide
a description of instrument and short particulars of the property or undertaking charged and description of assets or property.
MR06Statement of company acting as a trustee
MR07particulars of alteration of charge (particulars of a negative pledge)
MR07 continuation page 1particulars of alteration of charge (particulars of a negative pledge) continuation page to provide description of instrument.
MR07 continuation page 2Register particulars of alteration of a charge (MR07 continuation page 2)
MR08particulars of a charge where there is no instrument
MR09particulars of a charge subject to which property or undertaking has been acquired where there is no instrument
MR10Particulars for the registration of a charge to secure a series of debentures where there is no instrument
RM01notice of appointment of an administrative receiver, receiver or manager
RM02notice of ceasing to act as an administrative receiver, receiver or manager

Delay to register a charge or mortgage

Delay to register a charge or mortgage with Companies House may result your company director being liable to a fine.

What is a charge or mortgage?

When your company give a security for a loan, this transaction must be registered with Companies House with 21 days. The security is called a charge or a mortgage.

Delay to register a charge post a risk to your lenders and creditors. In the event of your company’s going bust or become insolvent, the loan or debt will not be treated as secured loan. This will result in the debts being settled after all the registered secured creditors are being paid. Thus, it is imperative that you register the security on time.

Apply to Court for extension if delay to register a charge or mortgage

Companies House will not be able to extend the 21 days time limit allowed for registering a charge. You must apply to court for an extension. For this reason, do check with your accountant or lawyer if you find yourself in this situation. Companies House would not be able to guide your through the court process.

Who is responsible?

Your company director is responsible to register a charge or mortgage with Companies House. Failure to do so, will lead to your company being fined.

How to file a charge or mortgage

It is important that you register your charge or mortgage as soon as your transaction with your lender completed. For instance, if you borrow money to buy a property, and your lender put a charge on the property. You must register this as soon as possible.

In this case, you would download the correct Companies House forms i.e. the form MR01, from Companies House website. You fill in the form and submit it together with the legal documents evidencing the charge to Companies House within 21 days.

Sensitive words in company or business name

Sensitive words in your company or business name that may imply your company is pre-eminent in the field or has a particular status or a specific function is not allowed unless you were given approval in writing by the relevant authority. Sensitive words are also referred to as the reserved words in incorporation matter.

If your company name contained the following sensitive words or reserved words, please obtain a letter or email of non-objection from the relevant governing body before you submit your incorporation documents with Companies House.

Reserved words in company names

If you are to use any of the reserved words in your company names, you must write to the relevant governing body for permission. Ideally, you must obtain the approval before you submit your incorporation.

Companies House would not process incomplete incorporation application. They will return your application and suggest to re-submit when you have everything or you change your company names.

Use of the word Audit and Auditor

No.Sensitive words Require approval from
1Accounts Commission for ScotlandAudit Scotland
4th Floor
102 West Port
Edinburgh
EH3 9DN
info@audit-scotland.gov.uk
2Accredit
Accreditation
Accredited
Accrediting
Department for Business, Energy & Industrial Strategy (BEIS)
Standards and Accreditation Team
Regulatory Delivery Directorate
1 Victoria Street
London SW1H 0ET
enquiries@beis.gov.uk
3Archwilydd Cyffredinol CymruArchwilydd Cyffredinol Cymru
Swyddfa Archwilio Cymru
24 Heol y Gadeirlan
Caerdydd
CF11 9LJ

Auditor General for Wales
Wales Audit Office
24 Cathedral Road
Cardiff
CF11 9LJ
info@wao.gov.uk
4Assurance
Assurer
Sensitive Business Names Team
Financial Conduct Authority (FCA)
25 The North Colonnade
Canary Wharf
London
E14 5HS
SensitiveBusinessN@fca.org.uk
5Auditor General
Audit Office
England
enquiries@nao.gsi.gov.uk
National Audit Office
157-197 Buckingham Palace Road
London
SW1W 9SP

Scotland
info@audit-scotland.gov.uk
Audit Scotland
4th Floor
102 West Port
Edinburgh
EH3 9DN

Northern Ireland
info@niauditoffice.gov.uk
Northern Ireland Audit Office
106 University Street
Belfast
BT7 1EU

Wales
info@wao.gov.uk
Wales Audit Office
24 Cathedral Road
Cardiff
CF11 9LJ
6Auditor General for Northern IrelandNorthern Ireland Audit Office
106 University Street
Belfast
BT7 1EU
info@niauditoffice.gov.uk
7Auditor General for Scotland
Audit Scotland
Audit Scotland
4th Floor
102 West Port
Edinburgh
EH3 9DN
info@audit-scotland.gov.uk
8Auditor General for WalesAuditor General for Wales
Wales Audit Office
24 Cathedral Road
Cardiff
CF11 9LJ
info@wao.gov.uk
9Chamber of Commerce/
Business/ Enterprise/ Industry / Trade / Training
England and Wales
enquiries@britishchambers.org.uk
British Chambers of Commerce
65 Petty France
London
SW1H 9EU

Northern Ireland
mail@northernirelandchamber.com
Northern Ireland Chamber of Commerce
22 Great Victoria Street
Belfast
BT2 7BJ

Scotland
admin@scottishchambers.org.uk
Scottish Chambers of Commerce
30 George Square
Glasgow
G2 1EQ
10Chartered AccountantEngland and Wales
generalenquiries@icaew.com
The Institute of Chartered Accountants in England and Wales
Chartered Accountants’ Hall
Moorgate Place
London
EC2R 6EA

Northern Ireland
hello@accountancyireland.ie
Chartered Accountants Ireland
The Linenhall
32-38 Linenhall Street
Belfast
BT2 8BG

Scotland
enquiries@icas.org.uk
The Institute of Chartered Accountants of Scotland
CA House
21 Haymarket Yards
Edinburgh
EH12 5BH
11Chartered SecretaryThe Institute of Chartered Secretaries and Administrators (ICSA)
Saffron House
6-10 Kirby Street
London
EC1N 8TS
memberssupport@icsa.org
12Comptroller and Auditor GeneralNational Audit Office
Elizabeth 2
151 Buckingham Palace Road
London
SW1W 9SS
enquiries@nao.gsi.gov.uk

Other Governing bodies in UK

No.Sensitive words Require approval from
1Banc
Bank
Banking
Sensitive Business Names Team
Financial Conduct Authority (FCA)
25 the North Colonnade
Canary Wharf
London
E14 5HS
SensitiveBusinessN@fca.org.uk
2Brenin
Brenhines
Branding Manager
Communications Division
Welsh Government
Cathays Park
CF10 3NQ
brandingqueries@wales.gsi.gov.uk
3Brenhinol
Brenhiniaeth
Branding Manager
Communications Division
Welsh Government
Cathays Park
CF10 3NQ
brandingqueries@wales.gsi.gov.uk
4Chamber of Commerce/
Business/ Enterprise/ Industry / Trade / Training
England and Wales
enquiries@britishchambers.org.uk
British Chambers of Commerce
65 Petty France
London
SW1H 9EU

Northern Ireland
mail@northernirelandchamber.com
Northern Ireland Chamber of Commerce
22 Great Victoria Street
Belfast
BT2 7BJ

Scotland
admin@scottishchambers.org.uk
Scottish Chambers of Commerce
30 George Square
Glasgow
G2 1EQ
5Chartered SecretaryThe Institute of Chartered Secretaries and Administrators (ICSA)
Saffron House
6-10 Kirby Street
London
EC1N 8TS
memberssupport@icsa.org
6Chartered SurveyorRoyal Institution of Chartered Surveyors (RICS)
RICS Headquarters
Parliament Square
London
SW1P 3AD
contactrics@rics.org
7Community Benefit SocietyFinancial Conduct Authority
25 The North Colonnade
Canary Wharf
London
E14 5HS
consumer.queries@fca.org.uk

Other sensitive words require approval prior incorporation

You may use sensitive words in your company name if you have been given permission to use it.

Sensitive words starting with the letter C.

Sensitive words
ComhairleCoimiseanComisiwn
Comisiwn Cynulliad Cenedlaethol CymruCommissionComptroller and Auditor General for Northern IrelandCo-operative
Co-operative Society
Council
Cymru
Cymreig
Cymraeg
CyngorCynulliad Cenedlaethol Cymru

Sensitive words starting with the letter D, E F and G

Sensitive words
Dental
Dentistry
Dentist
Dental Surgeon
Dental Practitioner
Diùc
Ban-diùc
Dug
Duges
Duke
Duchess
Ei Fawrhydi
Ei Mawrhydi
England
of England
English
FederationFinancial Conduct AuthorityFinancial Reporting Council
Financial Reporting Review Panel
FoundationFriendly SocietyFund
GovernmentThe Governor and Company of the Bank of EnglandGwasanaeth iechyd

Sensitive words starting with the letter H, I, J, K, L, M and N

Sensitive words
Health and Safety ExecutiveHealth and Social Care BoardHealth centre
Health service
Health visitorHis Majesty
Her Majesty
House of Commons
House of Lords
HPSS
HSC
InspectorateInstitute
Institution
Insurance
Insurer
Judicial appointment
King
Law CommissionLicensingLlywodraeth
Medical centreMidwife
Midwifery
Mòrachd
Mutual
National Assembly for Wales
National Assembly for Wales Commission
National Audit OfficeNHS
Northern Ireland
Northern Irish
Northern Ireland Assembly
Northern Ireland Assembly Commission
Northern Ireland Executive
Northern Ireland Audit Office
Nurse
Nursing

Sensitive words starting with the letter O, P and Q

Sensitive words
Office for Nuclear RegulationOifis sgrùdaidhOilthigh
Ombudsman
Ombwdsmon
ParlamaidParliament
Parliamentarian
Parliamentary
Patent
Patentee
Pensions Advisory ServicePolicePolytechnic
Post OfficePrifysgolPrince
Princess
Prionnsa
Bana-phrionnsa
Prudential Regulation AuthorityPrydain
Prydeinig
Public Health Agency
Queen

Sensitive words starting with the letter R and S

Sensitive words
Reassurance
Reassurer
Regional Agency for Public Health and Social WellbeingRegional Health and Social Care Board
RegistrarRegistered SocietyRegulator
Reinsurance
Reinsurer
RiaghaltasRìgh Banrigh
Rìoghachd AonaichteRìoghail RìoghalachdRoyal
Royalty
Scotland
of Scotland
Scottish
Scottish Law CommissionScottish Parliament
Scottish Parliamentary Corporate Body
SeneddSheffieldSiambr Fasnach
Social ServiceSocietySpecial School
StandardsStock exchangeSwyddfa Archwilio Cymru

Sensitive words starting with the letter T, U and W

Sensitive words
Teyrnas Gyfunol
Teyrnas Unedig
Trade UnionTribunal
TrustCharitable TrustFamily Trust
Investment TrustPension TrustSchool Trust
Trust companyTrust corporationUnit Trust
Tywysog
Tywysoges
Underwrite
Underwriting
University
Wales
Welsh
Wales Audit OfficeWelsh Government
Welsh Assembly Government
Windsor

Company accounts filing deadline

Company accounts filing deadline is set by Companies House on the day your company was incorporated. By comparison, the company accounts filing deadline for a private limited company and a public limited company is different. A private company has longer period to file compared to a public company.

For example, if your company is incorporated on 28 December 2018 and your default company accounting year end date is 31 December. This is same for both types of companies.

However, if your company is a private limited company, then your accounts filing deadline would be 30 September 2020. Which is nine months after your year end.

On the other hand, if your company is a public limited company then your default filing deadline would be 30 June 2020. which is six months and it’s shorter.

Change your year end date

You are allowed to change your company accounts filing deadline. In this case, you use the form AA01 to change your accounting reference date. You must submit the form with Companies House.

For one thing, your company accounts must not already overdue. Furthermore, your new accounts year end date must not cover period more than 18 months.

First company accounts filing deadline

The filing periods for first accounts for a private limited company is 21 months whereas for a public company is 18 months.

Your company accounts filed with Companies House is available for public to view. In other words, anyone interested in your company affairs can check your accounts with Companies House.

Audit or non-audit company accounts

Generally, a private limited company that meet the criteria of a small company is allowed to submit non-audit accounts with Companies House. In this case, you must opt to take advantage of the audit exemption. Accordingly, this fact must be disclosed in your company accounts.

Any other companies, medium sized or a large company and public limited companies, all must submit audited company accounts with Companies House.

The law governing the preparation of company accounts for a public limited company especially those with their shares listed in the stock exchange is vigorous. In this case, you are not only must comply with Companies House rules but also the Financial Conduct Authority (FCA) requirements.

Dormant company

Ordinarily, a dormant company registered as a public limited company must submit an audited company account. Even if your public limited company has no transaction whatsoever. In this situation, you must hire a qualified Auditor to take care of your company accounts.

You may re-register your public company to a private company is having a PLC status no longer serve your business.

On one hand, if your dormant company is a private limited company then you can file a non-audit dormant account.

Late filing penalty

You will receive late filing penalty if your accounts are filed late. The late filing penalty starts from £150 to a maximum of £1500 for a private company. It will cost you a lot more for a public limited company.

You may appeal to your late filing penalty If your circumstance causing the late filing is exceptional. In this case, you must write to Companies House explaining it. Even better if you have evidence to support your case. Otherwise, you would have no choice but to pay the penalty.

Submit your account soon after your financial year end. Don’t wait till last minute.

Types of company shares

There are four main types of company shares as defined by the Companies Act.

When forming your limited company, it is important to give a good thought about the types of company shares you are going to create and issue to your shareholders.

Your company may have as many different types of shares as you wish. Also, with different legal right and conditions attached to each type of share.

Ordinary share

The most common share type is ordinary share. This type of share has no special rights or restrictions. Thus, your company may divide the ordinary shares into classes of different values.

Preference share

Preference share carries a right that gives priority when come to annual dividends distribution before other classes of shares.

Cumulative preference

The next one is cumulative preference share. This type of share carries a right that if your limited company cannot pay the dividend in one year, it will carry it forward to successive years.

Redeemable share

Last but not least is the redeemable share. This type of share is issued with agreement that it will buy them back at the option of either your company or your shareholder after a certain period or on a fixed date. However, your limited company cannot only have redeemable shares.

Once you decided the types of shares your limited company are going to issue, you are to complete your statement of capital giving details of your shares types.

At every anniversary of your company incorporation, you are to update your statement of share capital whether there is any changes, as part of your Confirmation statement filing.

Admission to Stock Exchange

Public limited company must comply with the Admission to Stock Exchange listing rules before they are allowed to trade their shares publicly.

Your public limited company must provide information which satisfies the listing requirements. In this case, the Financial Services Authority set the rules and also governs public companies in the United Kingdom.

The Financial Services Authority is acting as the United Kingdom Listing Authority or UKLA.

Overall, there are two types Stock Exchange markets in the United Kingdom. The Senior Equity Market and the Alternative Investment Market (AIM).

Senior Equity Market

The Senior Equity Market is for larger public companies. It is also known as the Official List.

Alternative Investment Market

The Alternative Investment Market is the secondary stock market. It is opened to smaller companies in the United Kingdom.

Ordinarily, your public limited company must meet the following criteria in order to be eligible for admission to stock exchange in London.

Firstly, your company must be registered as a public limited company. Secondly, it must intend to place on the market shares which are expected to have a market value of £700,000 or more.

3 years preceding company accounts

Your company must have filed 3 years company accounts previously with Companies House. In addition, your company accounts must be audited. Preferably with unqualified audit report attached.

To put it simply, your company will not be admitted to stock exchange if it has not filed accounts covering three years preceding to your application for listing in the Stock Exchange.

Approved Sponsors

Most importantly, your directors must consider that your company is financially viable. Furthermore, your company must have sufficient working capital.

This admission requirement is satisfied by your Approved Sponsor to the issue. Usually, a merchant bank or stockbroker with overall responsibility for arranging the issue. This includes sending a letter to the United Kingdom Listing Authority stating that your directors have made careful enquiries to satisfy themselves and the Approved Sponsor that the working capital is indeed adequate.

The final principal admission requirement is that your company intend that at least 25% of any class of shares will be in the hands of the public. This is a must and it is spelled out in The Listing Rules.

Prospectus

Thereafter, your company must also satisfy the listing particulars requirements. Subsequently, your company must prepare and publish a prospectus which complies with Chapter 5 and 6 of The Listing Rules.

Correspondingly, you company must publish the following information.

  • Information on the shares which are to be listed.
  • Your share or loan capital.
  • Principal activities.
  • Place of business and employees.
  • Company’s finances. In the form of balance sheet and profit and loss accounts for the last three years. Also, management and on trends in the company’s business.

On the other hand, your company need to include a statement in your prospectus that your company accounts have been audited for the last three financial years. Furthermore, the people responsible for the prospectus need to make a declaration. To the effect that to the best of their knowledge, the information given in that part of the prospectus for which they are responsible is in accordance with the facts and contains no admissions likely to affect the import of the prospect us.

Additionally, you must also disclose if there is changes in your auditors in the previous three years. In this case, the details of audit options, tax clearances, and the terms of the directors’ service contracts.

Above all, your information in the prospectus should not be misleading, false or deceptive. Otherwise, your public limited company will incur both civil and criminal liability under the Financial Services and Markets Act 2000 if evidence supporting materials errors on the prospectus is established. In other words, do not even try to mislead your potential investors and manipulate the information on your prospectus.

Payroll Real Time Information

Payroll Real Time Information (often abbreviated as RTI) reporting with HM Revenue and Customs is compulsory if you are under the Pay As You Earn (PAYE) scheme.

Under the scheme, each time you make a salary payment you must report the income tax and national insurance contribution payable by your staff and your company before or on the day. You do this by submitting FPS form online.

If your company payroll is on monthly basis then you must submit FPS every month. However, if no salary was made in any months, you must submit the form called EPS stating zero payment was made.

Generally, your company is the employer thus has the responsibility to ensure correct income tax and national insurance contribution are deducted correctly from your staff. Subsequently, pay it over to HMRC.

One man company

PAYE payroll for a limited company, where the director is also the owner of the company. As long as your director intend to withdraw money from the company through salary and bonus payments, you must register for PAYE. Correspondingly, you must submit PAYE forms with HM Revenue and Customs. In this case, your director would be considered an employee of the company.

Payroll real time information software

There are many independent payroll software providers you may choose. Usually, purchase of the software comes with technical support. You may call them if you do not know how to use the software for Real time Information reporting.

Free payroll software

Furthermore, there are also free payroll software for small companies with no more than 10 staff. The Gov.UK website give a few recommendations.

Accounting for stock

Accounting for stock involves physical stock counts to its valuation at the financial year end. The closing stock value to be registered in your company accounts would have impact on your corporation tax liability.

If your company is subject to an audit, you auditor will take a good look at your company’s stock valuation policy. Especially if the stock represents significant assets in the company’s accounts and high stock volume is involved.

Normally, your auditor would send their own people to attend stock take at your premises. They would use the stock record you provide them. They would test the effectiveness of your stock accounting system. they would seek understanding how your business is recording, valuing, managing and storing your stock items.

To begin with they would select samples of stock items on your stock record and trace it through to the physical stock item. If they noted any variances in your physical stock to that of your stock record. They would want to know how you deal with damaged stock and missing stock and so on.

Consequently, your auditor would issue either qualified or unqualified audit report. Ideally, you would like to have an unqualified audit report. Because, this means your stock accounting system is good and gives a true and fair view of your company stock’s affairs.

However, if your auditor going to issue a qualified audit report, they would give reasons for their qualified report. You can then work to improve your stock accounting system so that you would not get the same audit report in the subsequent year. It is very important you get your stock accounting system right especially stock is your major asset in your business.

Objectives of stock valuation

The stock value included in your balance sheet represents your company’s current assets, it is often referred to as the stock or closing stock value. Usually, stock can be turned into cash fairly quickly if necessary. Concurrently, this closing stock value included in your balance sheet also also represent the value excluded from your profit and loss account.

There are two objectives you can achieve playing with stock valuation figures. Firstly, you can shift your business profit from one year to another by overvaluing your stock to achieve minimum corporation tax liability. Secondly, you can create fictitious profit by undervaluing your stock.

For this reason, some companies may attempt to overvalue their stock in order to pay minimum corporation tax. On the other hand, others may try to undervalue their stock to improve their financial performance for borrowing or proposing dividends purposes. Dependent on what your business needs at the time. However, this is not allowed by law.

Stock accounting methods

Generally, there are three generally accepted methods of accounting stock.

  1. The First In First Out (FIFO)
  2. The Last In First Out (LIFO)
  3. The Weighted Average Cost valuation

FIFO is widely used by many businesses. The stock valuation using FIFO is stock that is received first is also sold first. LIFO is stock received last is sold first. This is opposite of FIFO. Whereas Weighted Average Cost valuation is taking all the stock costs and divide them by the number of stock to arrive at the average cost of stock per unit.

Generally speaking, choosing an accounting for stock method to used for your business is largely dependent on your business itself. For example, if you are in fresh fruits wholesale, the FIFO method may be suitable and if you are in a vintage wine seller then LIFO is.

Above all, your accounting for stock policy adopted must provide true and fair value of actual physical stock held. In other words, your stock value shall be closest to its net realizable value or cost.

Stock items management

It is ideal to have a system to keep track of your physical stock. You may use a bespoke stock accounting system or manual stock recording system. Organised your physical stock storage for easy access and counting. This would ease your stock replenishment task too.

Occasionally, schedule a physical stock count. This would flag up the variances between your physical stock and stock on your system. You could then update your stock record accordingly.

Also, investigate the stock variances such as what made up the physical and system stock variances. Sometime, the stock could be still in transit, or damaged or stolen. Encourage staff to report damaged stock items and have a record of how the stock was damaged.

On one hand, regular stock count would also help to identify slow moving stock items. What are you going to do with slow moving stock items? You may sell it at discounted price. Or may be you return them to your suppliers if you have that arrangement in place.

Likewise, for high demand stock items, are the stock coming in on time to meet the demand?

Besides, regular stock take would also encourage staff that handling stock to be more efficient in terms of storage and retrieving stock items.

Basically, accurate physical stock would give you accurate stock value to be booked on your balance sheet. At the same time, it would also help you to make an informed decision on stock ordering and management.

Non deductible business expenses

Generally, business expenses incurred necessarily and exclusively for business are allowed for tax purposes. However, there are some non-deductible business expenses when come to calculating your tax liability.

For example, where the expenses incurred relates to both business and private use, the personal use portion is not tax deductible for your company. At the same time, you must add it back to your business accounting profit when calculating your tax liability.

Motor expenses

Likewise, a motor car is used for both business and private purposes. The capital allowances and the total car running expenses will be split in proportion to the business and private mileage. For this purpose, you will need to keep records of your total mileage and the number of miles traveled on your business. In order to calculate the correct amount of motor car expenses for your business.

Entertaining customers are non deductible business expenses

Usually, entertaining expenses are not tax deductible. However, staff entertaining expenses and gifts to employees are deductible but there are restrictions. Seek accountant advice on this.

Bribes, kickbacks. fines, penalties and lobbying costs.

These expenses are self explanatory of why they are not tax deductible.

Start-up costs

On one hand, If you have just started your business, you may be wise to consult a tax accountant advice especially if your start-up costs are rather large.

Working from home

On the other hands, If you are working from home, you will need to keep sufficient records. For example, to back up the proportion of heating and lighting costs that relate to your business and your private use.

Life insurance premiums

A business may buy life insurance coverage on key officers and executives. However, if your business is the beneficiary, the premiums are not deductible. Consequently, the proceeds from a life insurance policy are not taxable income to your business in the event of death. Because the cost of the premiums was not deductible. In short, premiums are not deductible, and proceeds upon death are excluded from income tax.

Travel and convention attendance expenses

Occasionally, some businesses pay for rather lavish conventions for their managers. Sometime, spend rather freely for special meetings at attractive locations that their customers attend for free. The UK tax office takes a dim view of such extravagant expenditures. They may not allow a full deduction for these types of expenses. The HM Revenue and Customs (HMRC) holds that such conventions and meetings could have been just as effective for a much more reasonable cost. In short, a business may not get a full deduction for its travel and convention expenses if the HMRC audits these expenses.

Transactions with related parties

The HMRC takes a special interest in transactions where two parties are related in some way. For example, a business may rent space in a building owned by the same people who have money invested in the business. Thus, the rent may be artificially high or low in an attempt to shift income and expenses between the two tax companies or individuals. In other words, the transactions may not be at arm’s length basis. For this reason, a business that deals with a related party must show that the price paid or received is at current market value.

Lastly, seek advice from tax accountants if you have incurred business expenses that you are not sure whether they can be claimed against your business profit fully or partially.

Voluntary strike off your company

Voluntary strike off your limited company means a director or directors of your limited company could make an application with Companies House to have your company dissolved. In other words, to have it removed from the register.

This process will terminate your company’s existence for good. Thereafter, your company would be available for public or your competitors to register as theirs company names.

To begin with, your company must meet certain criteria before you can apply to strike it off the register.

Firstly, you are obliged to comply section 1004 and 1005 of the Companies Act 2006. To put it another way, your company must not be involved in any litigation that is still on going with the court or under any insolvency arrangement that has not been concluded.

Secondly, you must inform everyone that would be directly affected by the decision to dissolve your company. Everyone in this situation includes your employee, creditor, director, manager, trustee and so on.

In other words, you must make sure that you do not contravene with Section 1006 and 1007 of the Companies Act 2006. Besides, you must serve the notice within 7 days.

Apply for a voluntary strike off your limited company

First of all, you apply using the Form DS01. All your directors must sign and date the form before you submit the form to Companies House.

Once Companies House approve your application, the proposal to strike off your company will be published in the Gazette for two months. During this period, if there is any person or organisation objects to your company being struck off, the process will be on hold. Companies House will get in contact with your directors.

Companies House is likely to put your voluntary striking off process on hold under the following circumstances.

  1. Company’s Value added tax (VAT) still unpaid.
  2. Corporation tax are still outstanding with HM Revenue and Customs.
  3. Creditors are pursuing their debts legally.
  4. Employees were not informed of your intention to strike off your company and you still owed them money.

After your company been dissolved

Subsequently, you do not have to submit your confirmation statement and company account to Companies House.

Late filing penalty

In the event that your company account is overdue. You would be liable to pay the late filing penalty. Usually, companies House would issue late filing penalty after they received your accounts.

This happens frequently to dormant companies. The owners either forgot or think that since their company is dormant therefore nothing to file.

For example, if your company account is already three months late. Instead of filing your dormant account and pay the £750 you can apply to strike off for your company. In this case, Companies House would no longer pursue any late filing penalty.

Want to dissolve your company

If you require help with dissolving your dormant company, our accountants would be able to help you. We will handle the dissolution process from start to finish for you and update you of the progress.

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