Companies House striking off and prosecutions
Striking off by arrears of filing
Almost as many companies as are registered are struck off the register in any year. This normally results from failure to file the annual return. Striking off is a big problem if you are trading because the bank will freeze your account and there is a legalistic procedure for restoring the company. Please contact us to avoid this happening. If it has already happened we can help with restoration services and new banking arrangements if necessary.
Allowing your company to be struck off
You may wish the company to be struck off but HM Revenue & Customs, and any potential creditor, may halt the striking off procedure until outstanding matters have been settled. In the case of HM Revenue & Customs this is likely to be outstanding CT600 Company Tax Return together with related accounts and tax computations and outstanding form VAT100 Value Added Tax Returns. You need to complete the VAT deregistration procedure and form VAT193 Final Value Added Tax Return.
Taxes for a company which has already been stuck off
When a company has been struck off, in practice, normally there is no further filing with HMRC once they are informed of the striking off, however, you should complete any outstanding returns and pay any applicable taxes. Generally HMRC take the view that "The directors are responsible for ensuring that the company is not struck off before the company affairs are concluded." Receipts by individuals could be taxable. Whether HMRC take any action is a matter for their choice. Any creditor who wishes to pursue the company needs to apply for it's restoration. Any action by HMRC is more likely to be taken against the directors. Shareholders are expected voluntarily to prepare outstanding returns and pay outstanding tax.
When directors have agreed a striking off with HMRC under Extra Statutory Concession C16, they remain liable for any further taxes which may arise from an enquiry or investigation.
Prosecution
Striking off can be avoided by liaising with Companies House but the time will come when they start criminal prosecution procedures. If you should receive a letter specifically notifying a final deadline before prosecution it is important to comply. After that date prosecution will take place and deferral of the date will not be entertained. Any accounts or annual return filed later will be reported at the court hearing but conviction, fine and award of costs is a foregone conclusion, based on the facts. The best that you can expect to achieve at this point is mitigation of the fine.
Striking off to escape the burden of penalties
Neither Companies House nor HM Revenue & Customs will hold a company on the register for the sole purpose of recovering penalties. If the balance of penalties outweigh the value of maintaining the company, liabilities may be settled and assets distributed, subject to normal tax and legal considerations, and the company struck off. Once the old company has been struck off a new company can take the original name. This procedure should be completed professionally and you must be careful to avoid fraudulent results.
Company restoration with Companies House
A company will only be restored after all outstanding accounts are filed and penalties are paid. Penalties stop increasing from the date the company is struck off.