Closing a limited company isn't just about stopping trading. You need to file a final CT600, deal with any remaining assets, and formally strike off or dissolve your company. Here's the complete process.

When do companies close?

Directors close companies for many reasons:

The business is no longer trading
You're retiring or moving on
The company has fulfilled its purpose (project companies, SPVs)
You're restructuring and transferring business to a new entity
The company has been dormant for years and you're tidying up

Whatever the reason, there's a tax process to follow before Companies House will remove your company from the register.

Step 1: File your final CT600

Before you can close your company, you must file Corporation Tax returns for all outstanding accounting periods — including the final one.

Your final accounting period

Your final accounting period runs from the day after your last filed period ended, up to the date you cease trading (or the date the company is struck off).

Example: Your last filed CT600 covered 1 April 2024 to 31 March 2025. You stop trading on 15 July 2025. Your final CT600 covers 1 April 2025 to 15 July 2025 (3.5 months).

Tell HMRC you're closing

Contact HMRC to tell them your company has ceased trading. They'll update their records and issue a final CT600 notice. Call 0300 200 3410 or write to:

Corporation Tax Services
HM Revenue & Customs
BX9 1AX

What goes on the final CT600

Your final return includes:

All income up to the cessation date
All allowable expenses up to the cessation date
Balancing charges or allowances — capital allowance pools are 'cleared' in the final period
Disposal proceeds — if you sell or distribute assets, the proceeds are taxable

Capital allowances in the final period

In your final period, you can't claim Annual Investment Allowance on new purchases. Instead:

Assets sold: Compare sale proceeds to the pool value
- If proceeds > pool value → balancing charge (added to taxable profit)
- If proceeds < pool value → balancing allowance (deducted from taxable profit)
Assets retained by directors: The market value counts as disposal proceeds
Assets scrapped with nil value: Full balancing allowance on remaining pool value

Step 2: Pay any Corporation Tax owed

Pay any tax due within 9 months and 1 day of your final accounting period end. Don't wait until the company is struck off — the tax debt doesn't disappear.

If the company can't pay its tax, you may need to consider formal insolvency rather than voluntary strike-off.

Step 3: Deal with company assets

Before closing, you need to deal with remaining assets:

Cash in bank accounts

Pay any outstanding debts, taxes, and expenses
Distribute remaining cash to shareholders as a capital distribution
Close the bank account

Capital distribution vs dividend

If you're distributing assets worth £25,000 or less, you can treat the distribution as a capital payment. The shareholder pays Capital Gains Tax (CGT) — typically 10% or 20% — instead of income tax on dividends.

If assets exceed £25,000, you'll need a Members' Voluntary Liquidation (MVL) to get capital treatment. This costs £2,000-5,000 in professional fees but can save significant tax on larger amounts.

Example: Director has £50,000 retained in the company.

As dividend: taxed at 33.75% (higher rate) = £16,875 tax
As capital distribution (MVL): taxed at 20% CGT = £10,000 tax
Saving: £6,875

Other assets (equipment, vehicles, IP)

Either sell them at market value (include proceeds in the final CT600) or distribute them to shareholders at market value (treated as disposal for capital allowances).

Step 4: Deregister from HMRC

You need to deregister from:

Corporation Tax — notify HMRC you've ceased trading
PAYE — if you run payroll, submit your final FPS and file the final P11D
VAT — if VAT registered, submit a final VAT return and deregister (you'll need to account for VAT on remaining assets)

Step 5: Strike off or dissolve

Two routes to formally close your company:

Voluntary strike-off (DS01)

The cheaper, simpler option. Apply using form DS01 (£33 fee) at Companies House.

Requirements:

Company has not traded or changed names in the last 3 months
No outstanding debts, charges, or court proceedings
All CT600s filed and Corporation Tax paid
All Companies House filings up to date (Confirmation Statement, accounts)

The company stays on the register for 2 months after the notice is published in the Gazette. If no objections, it's dissolved.

Members' Voluntary Liquidation (MVL)

For companies with significant assets (over £25,000). Requires a licensed insolvency practitioner.

Directors make a Declaration of Solvency (the company can pay all debts within 12 months)
Shareholders pass a special resolution to wind up
A liquidator is appointed to distribute assets and formally dissolve the company

More expensive (£2,000-5,000) but gives capital treatment on distributions over £25,000.

Step 6: Keep records

Even after closing, HMRC requires you to keep company records for 6 years after the relevant accounting period. This includes:

Annual accounts and CT600 returns
Bank statements
Invoices and receipts
Payroll records
Board minutes and resolutions

Common mistakes when closing a company

1. Not filing the final CT600

The company must have all CT600s filed before Companies House will accept a strike-off application. Miss this and you'll get penalties from HMRC even though the company has stopped trading.

2. Distributing assets before paying tax

Directors sometimes empty the bank account before filing the final CT600. If there's tax to pay and no funds in the company, HMRC can pursue the directors personally.

3. Forgetting balancing charges

If you take assets out of the company (keep the company laptop, for example), you need to account for this in the final CT600. The market value is treated as a disposal.

4. Not deregistering from VAT

If you don't deregister for VAT, HMRC will keep expecting VAT returns. You'll get automatic penalties for non-filing.

5. Closing before all liabilities are settled

If creditors object during the strike-off notice period, the process is halted. Make sure all debts are paid first.

Filing your final CT600 with Taxpipe

Taxpipe can handle your final CT600 just like any other return. Enter your final period dates, income, and expenses — we'll calculate the tax, generate the iXBRL accounts, and submit to HMRC.

The same £59 one-time fee applies. No special pricing for final returns.

File your final CT600 →

Summary

Closing a limited company properly means: file all CT600s (including the final one), pay outstanding tax, distribute remaining assets, deregister from HMRC services, and apply for strike-off or MVL. Keep records for 6 years.

The most common mistake is trying to close at Companies House before sorting out the tax side. HMRC doesn't forget — and penalties accumulate even after you've stopped trading.

Closing a Limited Company — Your Final CT600 and What to Do