Last updated: 18 October 2026
How to close a limited company in the UK
There are three main ways to close a solvent or insolvent limited company. Which one is right depends on whether the company can pay its debts and how much money is left to take out. Our guide above sets out the options in detail. Here is a quick summary for 2026/27.
1. Voluntary strike-off (DS01)
Strike-off suits a solvent company with little or no money left. Before you apply, the company must not have traded, changed its name or sold stock for the last 3 months, and you must settle debts with HMRC and suppliers. Since 1 February 2026 the Companies House fee is £13 online (£18 on paper). You must send a copy of the application to shareholders, creditors, employees and HMRC within 7 days. If no one objects, the company is usually dissolved about 2 to 3 months after the notice appears in The Gazette.
If the money distributed to shareholders before strike-off is £25,000 or less, it can be treated as a capital distribution and taxed under Capital Gains Tax rather than as a dividend. Anything above that is taxed as income, at dividend rates of up to 39.35%.
2. Members' Voluntary Liquidation (MVL)
An MVL is a formal process run by a licensed insolvency practitioner. It is often the most tax-efficient route when a solvent company has more than £25,000 to distribute. Distributions are usually taxed as capital gains, and Business Asset Disposal Relief may cut the rate to 18% (the 2026/27 rate) on up to £1 million of lifetime gains. HMRC's anti-avoidance rules can apply if you start a similar trade within two years.
3. Creditors' Voluntary Liquidation (CVL)
If the company cannot pay its debts, directors must stop trading and put creditors' interests first. A CVL, run by an insolvency practitioner, closes the company in an orderly way and lowers the risk of personal liability for wrongful trading.
Final accounts and tax returns
Before dissolution, you will normally need final accounts, a final CT600 Corporation Tax return, a final VAT return if you are registered, and a final payroll submission to close the PAYE scheme. Any money left in the company's bank account at dissolution passes to the Crown, so withdraw it first. Our limited company accountants prepare closure accounts and tax returns for a fixed fee.
Company closure FAQs
How long does it take to close a company?
A straightforward strike-off usually takes about 3 months from application. An MVL normally takes 3 to 12 months, depending on HMRC clearance.
Can HMRC chase me after the company is closed?
HMRC can object to strike-off or apply to restore the company if tax is unpaid. Directors can be personally liable in some cases. Read can HMRC demand tax after a company closes.
Should I make my company dormant instead?
If you may use the company again, keeping it dormant can be cheaper than closing and re-forming it. See is my company dormant? and our dormant company accounts service.
Thinking of closing your company? Talk to a chartered accountant before you act. The wrong route can cost you thousands in extra tax. Call 0800 644 1258 or book a free call back.