{"id":1573,"date":"2019-10-07T09:00:02","date_gmt":"2019-10-07T09:00:02","guid":{"rendered":"https:\/\/www.mintformations.co.uk\/blog\/?p=1573"},"modified":"2025-07-30T15:46:34","modified_gmt":"2025-07-30T15:46:34","slug":"how-to-close-limited-company-uk","status":"publish","type":"post","link":"https:\/\/www.mintformations.co.uk\/blog\/how-to-close-limited-company-uk\/","title":{"rendered":"How to close a limited company in the UK"},"content":{"rendered":"

Are you looking to close a limited company? This quick and easy guide will answer all your questions about how to close a limited company in the UK \u2014 and take you through the essential steps to complete the process.<\/h3>\n

GOV.UK defines a limited company<\/a> as \u201ca company limited by shares or limited by guarantee<\/a>\u201d. If you need to close your limited company because of unfortunate circumstances or because you want to begin a new business venture, you need to do the following:<\/p>\n

Complete all outstanding financial legalities<\/h3>\n

Before you can close your limited company, you must settle any outstanding bills and collect any fees or charges owing. You must also continue to cover operating costs until your business legally closes. These financial caveats may be labelled as allowable business expenses \u2014 reducing your final Corporation Tax bill.<\/p>\n

Complete a VAT form<\/h3>\n

When you\u2019re closing down your limited company, you must inform HMRC if you\u2019re VAT registered. Subsequently, you\u2019ll have to complete a VAT 7 form<\/a>.<\/p>\n

Your \u201cderegistration date\u201d will be given to you once HMRC receives the form. Remember, you must keep your VAT accounts up-to-date until HMRC confirms deregistration. Additionally, you\u2019ll have to complete a last VAT return for any leftover stock or company-owned equipment.<\/p>\n

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Avoid corporation tax reminders<\/h3>\n

You have to inform HMRC that your company\u2019s no longer trading to avoid receiving further reminders for Corporation Tax. The way you do this depends on whether HMRC has ever asked your company to file a company tax return.<\/p>\n

If you have never received a \u201cnotice to deliver a company tax return\u201d you can tell HMRC that you have a dormant company<\/a>. However, you must still file a tax return online if your company has previously filed a tax return. You can learn more about this through the GOV.UK website<\/a>.<\/p>\n

Terminate your PAYE scheme<\/h3>\n

If your company went through the process of setting up PAYE<\/a>, HMRC will need to know it\u2019s no longer in operation.<\/p>\n

Consider capital gains tax implications<\/h3>\n

If you are a freelancer, any equipment you used in the course of your business may be classed as belonging to your limited company. So, you may need to pay Capital Gains Tax on any items in your possession before your company\u2019s termination.<\/p>\n

Solvent or insolvent limited companies<\/h3>\n

When you\u2019re closing a limited company, you must consider the following things:<\/p>\n

Do your company\u2019s liabilities outnumber its assets?
\nCan your company\u2019s debts be paid promptly?<\/p>\n

If you answer \u201cyes\u201d to the above, then your company is solvent and you will have to distribute assets to shareholders. If you answer \u201cno\u201d then your company is insolvent as your company can\u2019t pay its liabilities.<\/p>\n

Closing a solvent limited company<\/h3>\n

You have a couple of options for closing a solvent company:<\/p>\n

Closure\/informal strike-off<\/h3>\n

A company director needs to complete a striking off form<\/a> to remove a business from the register at Companies House. You\u2019ll have to provide the following details on this form:<\/p>\n