October 26th, 2012 / Insight posted in

Being struck off limits losses

SL writes: Last year my elder brother died and I and a younger brother inherited the shares in his small private company. We discovered it was in urgent need of money and lent it funds to keep it going. We have now sold the business but further accounts are needed to cover the period to the cessation of trade. The company will not have any funds to pay for these accounts unless we inject more money. Is there any way we can avoid this expense and the statutory fines?

The company may have been making losses when your elder brother died and this may have continued in the period until trading stopped. These losses would account for the company´s lack of cash resources and its inability to pay creditors without the funds you injected. If so there is unlikely to be any tax liability. You need to apply for the company to be struck off the register of companies. This can be done by completing a form 652A. But first you will need to agree the company´s tax position with the Inland Revenue. It is possible to do this without the expense of producing a formal set of accounts but it will depend on the information you have. Management accounts, for example, may be acceptable to the Revenue. We suggest you write to the inspector of taxes to explain the situation and show how the company has performed. This may simply be a comparison between the last balance sheet submitted to the Revenue and the statement of affairs when the company ceased to trade. The fines for the late filing of 1998 accounts will not be pursued by Companies House because these are only triggered when the accounts are filed and this will not be necessary if the company is struck off the register.