Striking Off & Dissolution

Key facts

Apply using form DS01 to Companies House.
The company must have no debts, not have traded or changed its name in the last 3 months, and not be involved in any legal proceedings.
Distributions up to £25,000 can be treated as capital (and potentially qualify for BADR) under ESC C16.
Distributions over £25,000 are treated as income (dividends) unless the company goes through a formal liquidation.
The company must notify HMRC and file any outstanding tax returns before applying to strike off.

What Is Striking Off?

Striking off (also called voluntary dissolution) is the process of removing a company from the Companies House register. Once struck off, the company ceases to exist as a legal entity.^[1]

This is the simplest and cheapest method of closing a company, but it is only suitable for companies that are genuinely no longer needed and have no significant assets or liabilities.

Requirements for Striking Off

You can apply to strike off your company if it has:^[1]

Not traded or sold any stock in the last 3 months
Not changed its name in the last 3 months
No outstanding debts (including Corporation Tax, PAYE, VAT, and bank loans)
No outstanding legal proceedings (not being wound up, not in administration)
No assets that have not been properly distributed or dealt with

The DS01 Application Process

To apply for striking off:^[1]

The directors pass a board resolution to apply for strike-off
Complete and file form DS01 with Companies House (a £33 fee applies if filed on paper, £8 online)
Send a copy of the application to all interested parties within 7 days — including shareholders, creditors, employees, directors, and HMRC
Companies House publishes a notice in the Gazette giving 2 months for objections
If no objections are received, the company is struck off after the 2-month notice period

HMRC objections: HMRC will object to the striking off if the company has outstanding tax returns, unpaid tax, or is under investigation. Make sure all tax affairs are up to date before applying.^[4]

ESC C16: Capital Treatment for Distributions up to £25,000

When a company is struck off, any assets distributed to shareholders are normally treated as income (i.e. dividends). However, HMRC’s Extra-Statutory Concession C16 (now enacted in law) allows distributions to be treated as capital if:^[3]

The total amount distributed does not exceed £25,000
The company is dissolved under the striking-off procedure (not a formal liquidation)

Capital treatment means the distribution is subject to Capital Gains Tax (CGT) in the shareholders’ hands, rather than Income Tax on dividends. This is important because:

Treatment	Tax Rate	Reliefs Available
Capital (under £25,000)	18% or 24% CGT (depending on total gains)	CGT annual exempt amount; Business Asset Disposal Relief (BADR) at 18% may apply
Income (over £25,000)	10.75% / 35.75% / 39.35% dividend tax	£500 dividend allowance only

Tip: If the company has more than £25,000 to distribute, consider a Members’ Voluntary Liquidation instead. MVL distributions are treated as capital regardless of the amount, and BADR may reduce the CGT rate.

Tax Obligations Before Striking Off

Before applying for strike-off, the company must:^[2]^[4]

File all outstanding CT600 returns (including the final period)
Pay all outstanding Corporation Tax
File final PAYE returns and issue P45s to directors/employees
Deregister for VAT if registered
Distribute or otherwise deal with all company assets
Close the company’s bank account after final distributions

Any assets remaining in the company at the point of dissolution become bona vacantia (ownerless property) and pass to the Crown. The final CT600 covers the period up to cessation — you can submit the final return online before applying to Companies House.

Frequently Asked Questions

How do I close down a limited company?

The simplest method is to apply for voluntary striking off using form DS01 at Companies House. The company must have no debts, not have traded in the last 3 months, and have no outstanding legal proceedings.

What is the £25,000 rule for striking off a company?

Under ESC C16, distributions up to £25,000 made when striking off a company are treated as capital (subject to CGT). Distributions over £25,000 are treated as income (dividends) unless the company goes through a formal MVL.

How much does it cost to strike off a company?

The Companies House fee for filing DS01 is £8 online or £33 on paper. You must also ensure all outstanding tax returns are filed and any Corporation Tax, PAYE, or VAT liabilities are cleared.

Will HMRC object to striking off my company?

HMRC will object if the company has outstanding tax returns, unpaid tax, or is under investigation. Make sure all tax affairs are up to date before applying.

What happens to assets left in a company when it is struck off?

Any assets remaining in the company at the point of dissolution become bona vacantia (ownerless property) and pass to the Crown.

Sources

Strike off your company from the Companies Register — GOV.UK
Company Taxation Manual: CTM36800 – Company ceasing to exist — GOV.UK
Capital Gains Manual: CG64050 – ESC C16 — GOV.UK
Closing a limited company — GOV.UK