Charge rent for use of your home office

As a limited company company director you can charge your company a rent for using a room in your home as an office. We recommend that you have a rental agreement in place between you and the company and we have made available a selection of agreements available for free download here at tips.HRBS.biz , choose rar files (rar file) or zip files.

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How to dissolve your limited company from £10.00

If your limited company is no longer required, for example if the company was set up for a specific project which has now finished, you can apply to have it struck off from the register at Companies House.

This brief guide relates to striking off formerly trading companies which have now stopped trading and are no longer required. It does not refer to a formal insolvency process.

To quote Companies House …

“A private company can apply to be struck off if, in the previous three months, it has not:

• traded or otherwise carried on business;
• changed its name;
• for value, disposed of property or rights that, immediately before it ceased to be in business or trade, it held for disposal or gain in the normal course of its business or trade (for example, a company in business to sell apples could not continue selling apples during that three-month period but it could sell the truck it once used to deliver the apples or the warehouse where they were stored);
• engaged in any other activity except one necessary or expedient for making a striking-off application, settling the company’s affairs or meeting a statutory requirement (for example, a company may seek professional advice on the application, pay the costs of copying the Form 652a, etc). However, a company can apply for striking off if it has settled trading or business debts in the previous three months.”

This course of action, known as a Section 652 striking off, is applicable where all creditors have been paid and final accounts and tax computations have been prepared, otherwise creditors can oppose the striking off and alternative, more expensive methods of dissolving the company would need to be taken.

Other things to consider before an application is made include closing the company’s bank account, transferring domain names, paying any professional fees involved with the striking off etc. These should be done before you apply for striking off, otherwise the assets may become the Crown’s property (see below) .

For example if your company ceased trading on 31 July 2008, you can apply under S652 from 1 November 2008. You can (and should) however distribute the assets prior to this date.

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Maximise use of your basic rate tax band

I originally posted this article on the a4uforum in March 2007, and have updated it for the current tax thresholds.

We recommend to all our clients that they maximise the use of their basic rate band. This can be done by declaring interim dividends to take total taxable income upto the maximum at which the basic rate will still apply.

As dividends have a 10% tax credit attached, this tax credit can be used to effectively pay your personal tax liability on the dividend.

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Popularity: 12%