If you want to close a solvent limited company, the most common route is a voluntary strike-off using form DS01, filed with Companies House for £13 online (or £18 by post) from 1 February 2026. The application must be signed by a majority of directors, and the company is dissolved roughly two to three months after the notice appears in The Gazette. Before you apply, you must settle every tax bill, file outstanding accounts, pay creditors and distribute any remaining funds.
DS01 is the right route if your company is dormant, never traded, or has stopped trading and owes nothing it cannot pay. If the company has debts it cannot clear, strike-off is not appropriate, you would need a members' or creditors' voluntary liquidation instead.
What Is a DS01 Strike-Off?
A strike-off (also called voluntary dissolution) removes your company from the Companies House register so it legally ceases to exist. Once struck off, the company can no longer trade, hold assets or operate bank accounts. Any assets left in the company at dissolution pass to the Crown under bona vacantia, so empty the bank account first.
It is the cheapest and simplest way to close a company that has no significant debts. Larger or insolvent companies must instead use a formal liquidation handled by a licensed insolvency practitioner.
Strike-Off Eligibility: Can Your Company Apply?
To apply for strike-off, in the last three months your company must not have:
- Traded or sold any stock (other than winding-up activity)
- Changed its name
- Disposed of property or rights for value (e.g. sold premises it traded from)
- Engaged in any activity except that needed to close down
You also cannot apply if the company is the subject of insolvency proceedings, a creditors' arrangement, or a court action to wind it up.
How to Close a Limited Company: Step-by-Step
| Step | Action | Who/where |
|---|---|---|
| 1 | Inform staff, follow redundancy rules and run final payroll (P45s, final FPS, close PAYE scheme) | You / HMRC |
| 2 | Settle Corporation Tax, VAT and PAYE; file the final accounts and Company Tax Return | HMRC |
| 3 | Deregister for VAT (form VAT7) if registered | HMRC |
| 4 | Distribute remaining cash and assets to shareholders | Directors |
| 5 | Close company bank accounts | Bank |
| 6 | File form DS01, signed by a majority of directors | Companies House |
| 7 | Notify interested parties (creditors, members, employees, pension trustees) within 7 days of filing | You |
You must keep business records for seven years after the company is dissolved, longer for some payroll and pension documents.
DS01 Cost and Timeline
The Companies House fee is £13 online or £18 for a paper DS01 (cheque or postal order, not from the company's own account). Online filing via the Companies House service is faster, and it is the route we recommend.
Once accepted, Companies House publishes a first notice in The Gazette. If no one objects, a second notice follows and the company is dissolved, typically two to three months from the first notice. The full official process is set out in the GOV.UK guidance on how to apply for strike-off.
What are the key rates and limits for closing a company in 2026/27?
These are the figures that decide how much a closure costs you, all current for the 2026/27 tax year and taken from GOV.UK and HMRC.
| Item | 2026/27 figure | Notes |
|---|---|---|
| DS01 fee (online) | £13 | £18 by post, from 1 February 2026 |
| Dissolution timeline | 2 to 3 months | From the first Gazette notice, if unopposed |
| Capital-distribution limit (s1030A) | £25,000 | Company-wide, not per shareholder; above this the whole sum is taxed as a dividend |
| Business Asset Disposal Relief rate | 18% | On qualifying gains from 6 April 2026 (was 14% in 2025/26) |
| Dividend allowance | £500 | First £500 of dividends tax-free |
| Dividend tax rates | 10.75% / 35.75% / 39.35% | Basic / higher / additional rate |
| Corporation Tax (final return) | 19% to 25% | 19% up to £50,000 profit, 25% over £250,000, marginal relief between |
| VAT registration threshold | £90,000 | Deregister via form VAT7 once trading stops |
Worked example: extracting £24,000 of reserves on closure
Say your company has stopped trading with £24,000 of cash left after settling its final Corporation Tax, VAT and PAYE. You are the sole director-shareholder and a higher-rate taxpayer.
Because the distribution is under the £25,000 limit, the whole £24,000 is treated as capital on strike-off, not as a dividend. After your annual CGT exempt amount, the gain is taxed under Capital Gains Tax, and if you qualify for Business Asset Disposal Relief the rate is 18% for 2026/27. On the capital route the relieved tax could be roughly £4,000 to £4,300 on that £24,000, depending on your available CGT allowance.
Take the same £24,000 as a final dividend instead and, after the £500 dividend allowance, a higher-rate taxpayer pays 35.75%, around £8,400. That is close to double the tax for the sake of one tick-box on how you close down. Cross the £25,000 line by even £1, though, and the capital route is lost entirely unless you pay for a members' voluntary liquidation, which is why the order and size of your final distribution matters more than the DS01 itself.
Tax You Must Settle Before Closing
Closing the company does not cancel its tax obligations; those must be cleared first.
- Corporation Tax, file a final Company Tax Return covering the period to the date trading stopped, and pay any tax due. The main rate is 25% for profits over £250,000 and 19% for profits up to £50,000, with marginal relief between.
- VAT, if registered (the threshold is £90,000 turnover), submit a final return and cancel registration. A company can also deregister voluntarily once trading stops, even if it was below the £90,000 limit.
- PAYE, pay final liabilities and close the scheme.
Extracting the Final Profits Tax-Efficiently
How you take the last of the company's reserves matters. Distributions of up to £25,000 on closure are usually treated as capital, taxed under Capital Gains Tax rather than as a dividend, and may qualify for Business Asset Disposal Relief at 18% for 2026/27 (the rate rose from 14% in 2025/26). Above £25,000, the whole distribution is generally taxed as income unless a formal liquidation (MVL) is used.
Whether the capital route is worth it depends on your gain and your other income, so it is worth reading our guide to how much Capital Gains Tax you pay before you decide how to extract the final reserves.
If you take reserves as a final dividend instead, only the first £500 dividend allowance is tax-free; beyond that, dividends are taxed at 10.75%, 35.75% or 39.35% depending on your band. With a personal allowance of £12,570, the higher-rate threshold at £50,270 and the additional rate from £125,140, timing the extraction across tax years can save real money. It is worth planning before you file the DS01, our company secretarial services team can map the most efficient route.
What Happens if Someone Objects?
Creditors, HMRC or other interested parties can object to a strike-off, most often when tax or a debt is outstanding. That is exactly why you clear liabilities first. If a company is struck off with debts still owing, directors can be held personally liable, and the company can be restored to the register for up to six years from dissolution (whether by administrative restoration or court order), with no time limit where the restoration is to pursue a personal-injury claim against the company. If you need to reverse a strike-off, our guide on how to restore a dissolved company sets out both routes.
Frequently Asked Questions
Can I close a dormant company the same way?
Yes. A dormant company that has never traded, or stopped trading over three months ago, is one of the simplest DS01 cases, provided final accounts and any tax returns are up to date and the company owes nothing.
A dormant company still has filing duties right up to closure, so make sure its record is current first; our guide to dormant company accounts and how to file them covers the lighter-touch accounts you may still owe.
What happens to money left in the bank when a company is struck off?
Any cash or assets remaining at dissolution become bona vacantia and pass to the Crown. Always distribute funds to shareholders and close the bank account before the company is struck off.
Do I need an accountant to file a DS01?
No, the DS01 itself is straightforward. The value of an accountant is in the work around it, final returns, VAT deregistration, closing PAYE and extracting reserves as capital rather than income to cut your tax bill. See our FAQ for more on what closure support includes.
How long after dissolution must I keep records?
Keep all company records, including accounts and bank statements, for at least seven years from the dissolution date, in case of an HMRC enquiry or a restoration claim.
Closing a company cleanly is as much a tax exercise as an admin one, and the order you do things in decides how much you keep. If you would like us to handle the final accounts, deregistrations and DS01 from start to finish, get in touch with Zmartly and we will close it properly.
