Filing dormant accounts for RTM

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    Filing dormant accounts for RTM

    Hi all. I'm part of a small RTM company and am just filing dormant accounts for the first time (we had an agent doing it on our behalf til recently but have decided to go it alone as they were beyond useless, but that's another story...). I'm confused about how to fill in the form, can anyone help? What do I put in Called up Share Capital not paid, and assume cash in bank is literally just our balance? What do I put in Issued Share Capital - we don't have shares but it won't let me just put 0 in all the fields. Many thanks in advance for any advice, sure it can't be hard! Accounts.PNG
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    #2
    Called up share capital not paid would be zero.

    For a typical RTM, cash in bank would be zero, as the service charge fund is not an asset of the company.

    I've never used this form myself, but are you sure that the company has been correctly registered as limited by guarantee?

    It might not like the increase in assets.

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      #3
      How can an RTM company be dormant?

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        #4
        Because it doesn't own the service charge and doesn't receive any ground rent. I believe it is normal for RTMs.

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          #5
          An R.T.M. company pays the bills, workmen, with cheques in the name of the R.T.M. company that holds the leaseholders money "on trust". If that is the case, an R.T.M company is not dormant.
          The R.T.M. company may have an agent running the place, and the company secretary is the agent, but still representing the R.T.M. company.

          Many R.T.M. companies do have dormant accounts, but still operate on above lines.
          Not right in my opinion.

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            #6
            A dormant company is one which does nothing except the absolute minimum necessary to comply with company law. If money is being collected and paid out by an agent on behalf of a company the company is not dormant.

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              #7
              The money is being collected as trustee for the leaseholders, and the RTM never has beneficial ownership. If not already explicit, the trust is created by section 42 of the 1987 Landlord and Tenant Act. It shouldn't appear on the company balance sheet as the whole point of the statutory trust is to isolate it from the landlord's assets.

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                #8
                Tech 03/11 states
                1.2.1 Trust monies do not belong to the RMC/RTM Company and so should not be included as an asset in the statutory accounts of the Company.
                1.2.2 The treatment of transactions relating to service charge transactions in the RMC/RTM Companies statutory accounts … is subject to debate. It is not disputed that service charge monies are received on trust but the consequences of this in accounting for the transactions settled from such funds have yet to be clarified.
                1.2.4 Separate guidance and examples for the treatment of service charge transactions in RMC/RTM Companies statutory accounts will be issued when the underlying principles have been agreed.

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                  #9
                  If nothing has changed, all you need to do is copy the information which was filed last year and change the dates. You can obtain the information from Companies House if you do not possess a copy,

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                    #10
                    Every company has to file an annual company account at Companies House and you can look up the record of last year's filing by your RTM at Companies House online website. The CH records can be viewed online , will show the next filing due date which the RTM must comply or the Directors will face an automatic fine ( rather like the £100 fine by HMRC for failing to submit SATR by 31st Jan . The Director can seek advice on filing dormant accounts from local accountant shops offering VAT and bookkeeping services to small businesses.

                    The filing of "dormant account" is accepted by Companies House if the company has no reportable trading transactions during the year except for the annual filing fee paid to Companies House .

                    The RTM is a legal non-profit entity which does not trade with external parties, has no ground rent income due to itself but it has the legal right to claim administration of the service charge account and to demand the annual service charge levy from the leaseholders.

                    The RTM or its appointed managing agent can open a "client bank account" to hold service charge money demanded from leaseholders which is treated as unspent money belonging to the leaseholders ( held in a trust account for the leaseholders ).

                    The RTM company is usually a company " limited by guarantee" and the copy of records filed for last year should be held at the registered address of your last agent and should be handed over to the director. The filing deadline is about 9 or 10 months from end of the company's accounting year ( which may not be same as HMRC's tax year ending on 5th April ).

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                      #11
                      Originally posted by Gordon999 View Post
                      The filing of "dormant account" is accepted by Companies House if the company has no reportable trading transactions during the year except for the annual filing fee paid to Companies House .
                      Another grey area in leasehold that does nothing to improve confidence in the sector.

                      For those who want to read more;

                      https://www.frc.org.uk/consultation-...dential-manage

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                        #12
                        RTMs cannot be anything other than limited by guarantee!

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                          #13
                          Originally posted by leaseholder64 View Post
                          The money is being collected as trustee for the leaseholders, and the RTM never has beneficial ownership. If not already explicit, the trust is created by section 42 of the 1987 Landlord and Tenant Act. It shouldn't appear on the company balance sheet as the whole point of the statutory trust is to isolate it from the landlord's assets.
                          No argument with any of that, but the point is that the company is engaging in transactions through an agent. An RTM may be dormant for tax purposes, but not for filing accounts.

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                            #14
                            zzhallk,

                            There is a guide showing how to file dormant accounts , posted on youtube :

                            https://www.youtube.com/watch?v=hp92ZjRj9MY

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                              #15
                              The ICAEW intended to issue further guidance as explained in #8. We are now 8 years further on and nothing has emerged which indicates that the experts are unable to agree.

                              Meanwhile the majority of the accountancy profession seems to be following the dormant company route. The logic seems to be that if the bank account does not belong to the company, then the receipts and payments within that bank account cannot belong to the company. They have gone further by placing other income, which does belong to the company and which should be subject to corporation tax, into the service charge accounts in order to retain the dormant company status. HMRC appears to be turning a blind eye presumably because the amounts are regarded as insignificant.

                              Claiming to be dormant can harm a company when it tries to appoint suppliers of services.

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