MTDFix company guide · Author: Marina Jahan · Technical check: Shamayun Chowdhury (ACMA, CMA) · Tax year 2026/27 · Reviewed October 2026
Quick answer
Dissolving a limited company means applying to Companies House to have it struck off the register, after which it no longer exists in law. The route is designed for solvent companies that have stopped trading and cleared their debts. Directors file Form DS01, the online fee is £13, and the company is normally removed around three months after the application.
A company often outlives its purpose. The contract it was set up for may have finished, you might have moved into employment, or you may simply be ready to retire. Yet while it stays on the register, it still owes Companies House a confirmation statement and accounts every year, and HMRC a Company Tax Return. Dissolving a limited company brings those obligations to an end, provided the steps are taken in the right sequence.
Below we explain what dissolution actually is, who qualifies, each stage of the process, how long it lasts, what it costs and how the money you take out is taxed in 2026/27. For the wider picture, including liquidation, see our main guide to closing a limited company.
Dissolving a Limited Company: What It Means
Dissolution takes a company off the Companies House register. From that point it has no legal existence: it can’t trade, hold assets, keep a bank account or face a claim in its own name.
Technically, any company that has been struck off is “dissolved”, whether its directors asked for that or Companies House removed it because filings stopped. In everyday use, though, people mean voluntary strike-off: directors choosing to close a solvent company that has wound down its business.
Strike-off or liquidation?
The terms are often mixed up. Strike-off is a low-cost process directors can run themselves. Liquidation is a formal procedure led by a licensed insolvency practitioner, used for insolvent businesses, and also by solvent ones sitting on large reserves they want to distribute. A liquidation also ends with dissolution, but it costs more and takes longer. The comparison table in part two of this guide sets the routes side by side.
Who Can Use Strike-Off? An Eligibility Check
Applications must satisfy the strike-off conditions in the Companies Act. Run through this list before filing anything.
In the three months leading up to the application, it must not have:
- traded or carried on its business;
- changed its name;
- sold trading stock or assets, other than as part of winding down;
- done anything beyond what’s needed to close and settle its affairs.
It must also:
- not be in, or heading for, administration or liquidation;
- not be subject to a formal arrangement with creditors;
- have the application approved by all directors or a majority of them.
Accountant’s view
Strike-off is for companies that can settle what they owe. If there are debts you know can’t be paid, and HMRC is the usual one, choose a different route. Creditors are entitled to object, and directors who use strike-off to walk away from liabilities risk disqualification and personal liability.
If every point above is clear, you can move on to the process. If any are uncertain, get advice first, because a flawed application can be suspended or cancelled.
Steps for Dissolving a Limited Company (Including Online Strike-Off)
The safest order is: tidy the finances, settle with HMRC, file DS01, then notify everyone with an interest. Most delays and objections come from doing these out of sequence.
1. Clear debts and collect money owed
Pay suppliers, complete any outstanding work and chase customers for unpaid invoices. Deal with the director’s loan account by repaying it or documenting exactly how it will be settled. An unpaid creditor can object later and block the strike-off.
2. Bring HMRC up to date
Prepare closing accounts and a final CT600 to the date trading stopped, and pay any Corporation Tax. Employers should submit a final FPS marked as the final one, then shut the PAYE scheme down. VAT-registered companies need to deregister and file a last VAT return. Because HMRC can object, having everything filed first avoids the most common hold-up.
3. Pay out what’s left and close the account
With every bill settled, withdraw remaining cash or assets before dissolution. Anything left in the company’s name afterwards passes to the Crown. Hold back enough for the Companies House fee and any final invoices, then close the bank account.
Accountant’s view
The slip we see most is a director emptying and closing the bank account before the last Corporation Tax payment and closing accounts fee have gone out. List every remaining cost first, keep the money aside, and only then make the final withdrawal.
4. Submit Form DS01
The Companies House online service is the fastest way to apply, using the company’s authentication code. Directors (or a majority) approve the application, and the digital fee is £13. Identity checks introduced by the Economic Crime and Corporate Transparency Act also apply, so make sure each director’s identity has been verified with Companies House before you submit. A paper form is still available but takes longer.
5. Send copies within seven days
Within a week of filing, every shareholder, creditor, employee, pension trustee and non-signing director must receive a copy of the application. Include HMRC if tax is owed either way. Missing this step is a criminal offence, so keep evidence of when each copy went out.
6. The Gazette notice and objection window
Companies House then advertises the application in The Gazette, the UK’s official public record. A window of two months or more follows, in which creditors, HMRC or anyone with a valid reason can object.
7. Strike-off is completed
If no objection is lodged, the company is removed from the register and a second Gazette notice confirms it. From that date it no longer exists. Online applicants usually receive email updates along the way.
Dissolving a Limited Company: How Long Will It Take?
Expect roughly three months from the date DS01 is filed, plus whatever time your preparation needs. The two-month objection window is fixed and Companies House can’t shorten it.
| Stage | Usual timescale |
|---|---|
| Clearing debts, closing accounts, ending PAYE and VAT | 2–8 weeks, depending on the state of the books |
| DS01 filed; copies sent to interested parties | Day one, copies within seven days |
| First notice in The Gazette | Normally a few weeks after filing |
| Objection window | Two months minimum |
| Removal from the register; second notice | About three months after filing |
Objections are the main source of delay, very often from HMRC over a missing return or unpaid tax, and Companies House may then pause the application until it’s resolved. Incomplete forms, directors who haven’t verified their identity, or activity after filing can also slow things down. If the company resumes trading or changes its name, the application has to be withdrawn. If you want the company gone before the next accounts or confirmation statement fall due, file DS01 at least three months ahead.
What Does Dissolving a Limited Company Cost in the UK?
The Companies House charge is modest: £13 for an online DS01 from 1 February 2026, with a slightly higher paper fee. The larger cost is normally the accountancy work needed to close properly.
| Item | Applies to | Guide cost |
|---|---|---|
| DS01 filing fee | Every voluntary strike-off | £13 online; £18 on paper |
| Closing accounts and CT600 | Nearly all companies | Depends on complexity; request a fixed price |
| Ending payroll and VAT | Employers and VAT-registered businesses | Usually included in the closing work |
| Members’ voluntary liquidation instead | Solvent firms holding large reserves | Practitioner fees, commonly running into thousands |
For a straightforward company with up-to-date books, you’re often looking at £13 to Companies House and an accountancy fee for the closing accounts. It rises when records are behind, when HMRC matters are unresolved, or when the sum being extracted makes liquidation the better route. Even so, strike-off remains the lowest-cost way to close.
How Dissolving a Limited Company Is Taxed
One figure drives the tax result: £25,000. Final distributions up to that total can be taxed as capital. Go over it and the entire amount is generally taxed as a dividend.
The £25,000 limit
Under Corporation Tax legislation, money paid out ahead of a planned strike-off counts as capital, provided the total doesn’t exceed £25,000. That’s usually better, because capital gains rates are lower than dividend rates. Exceed the limit by even £1 and the whole distribution, not just the excess, becomes income.
Business Asset Disposal Relief
Where the payment is a capital gain, Business Asset Disposal Relief may apply. The usual tests are a holding of at least 5% of shares and votes, plus two or more years as an officer or employee. For disposals from 6 April 2026 the rate is 18%, compared with 14% in 2025/26.
Worked example (illustrative)
Asha owns and runs a consultancy company; her other income already puts her in the higher rate band. Once all debts are cleared, £22,000 remains. If it’s paid out as capital and Business Asset Disposal Relief applies, the £3,000 annual exempt amount comes off first, leaving £19,000 taxed at 18%: £3,420. Taken as a dividend instead, £21,500 above the £500 dividend allowance would be taxed at 35.75%: £7,686.25. Staying within the £25,000 limit saves Asha about £4,266.
The anti-avoidance rule
Begin a similar business within two years of closing and HMRC may reclassify that last payout as income instead of capital. Think through any new venture before you dissolve.
Strike-Off, Liquidation or a Dormant Company?
Dissolving a limited company isn’t the only option. The right route depends on solvency, how much is left in the company, and any chance you’ll need the company again.
| Strike-off (DS01) | MVL (solvent liquidation) | CVL (insolvent liquidation) | Keep it dormant | |
|---|---|---|---|---|
| Suits | Solvent, £25,000 or less to extract | Solvent, bigger reserves | Unable to pay debts | Possible future restart |
| Handled by | The directors | A licensed liquidator | A licensed liquidator | The directors |
| Cost | Low | Higher | Higher | Small annual filings |
| Timescale | Around 3 months | Several months or longer | Several months or longer | Ongoing |
| Tax on final payout | Capital treatment to £25,000 | Capital treatment, no upper limit | Usually nothing to distribute | None until it restarts |
If restarting is a real possibility, keeping the company dormant may be simpler. Where liabilities exceed what the company can pay, a licensed insolvency practitioner should be your first call.
After Dissolution: What Happens Next
Once the second Gazette notice appears, the company has gone. Any property it still held belongs to the Crown, and directors remain accountable in some respects.
- Forgotten assets: cash sitting in an overlooked account, or any other asset still held, is treated as bona vacantia, meaning it has no owner and goes to the Crown. Recovering it generally requires restoration, so clear every account before you apply.
- Director responsibility: personal guarantees on loans or leases survive dissolution. Using strike-off to escape debts can lead to disqualification and personal liability. Retain the company’s books for six years or more, as HMRC may still raise questions.
- Restoration: the court can bring back a company that was voluntarily struck off, normally within six years, for instance if a forgotten asset comes to light.
Dissolving a Limited Company: Common Questions
Can I strike off a company that still owes money?
Not if you can’t pay it. An unpaid creditor may object; insolvent companies belong in a creditors’ voluntary liquidation.
What’s the Companies House fee?
£13 for an online DS01, plus your accountant’s fee for closing accounts if you use one.
How quickly can a company be dissolved?
Typically around three months after the DS01 is filed.
Do I need an accountant to dissolve my company?
No, any director can submit DS01. The closing accounts and tax return still have to be correct.
What if money is still in the business account?
It passes to the Crown on dissolution, so withdraw it before applying.
Can I cancel a strike-off application?
Yes, with Form DS02. Withdrawal is compulsory if the company starts trading again.
Can a struck-off company come back?
Yes, through a court application, normally within six years.
Can I set up a new company afterwards?
Yes, but starting a similar trade within two years can turn your final distribution into taxable income.
Final Verdict: Should You Be Dissolving a Limited Company?
For a solvent company with £25,000 or less to take out, strike-off is the most straightforward and economical way of dissolving a limited company. Settle the debts, bring HMRC up to date, withdraw the cash and file DS01 for £13, and the company should be gone in about three months. Where debts can’t be paid, or the reserves are well above £25,000, liquidation is usually the better path.
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