Last reviewed: 29 September 2026 · Reviewed by IFM's qualified accountant
“Dormant” sounds like nothing needs doing. In practice, it is a status used differently by Companies House and HMRC, and the company continues to exist with directors and filing duties.
What should you know about dormant for Companies House?
Companies House treats a company as dormant for a financial year when it has had no significant accounting transactions. A significant transaction is one that should be entered in the company’s accounting records.
Certain items are specifically disregarded when deciding dormancy. GOV.UK lists:
- money paid for shares by the subscribers when the company was incorporated;
- Companies House fees for a change of company name, re-registration or filing a confirmation statement; and
- payment of a civil penalty for late filing of accounts.
Other activity can break dormancy. Receiving bank interest, paying routine business costs, buying or selling, employing someone or receiving income may be significant depending on the circumstances. Do not assume that “no sales” automatically means dormant.
What should you know about dormant for Corporation Tax?
HMRC uses its own test. A company is usually dormant for Corporation Tax if it has stopped trading and has no other income, or if it is newly incorporated and has not started trading. HMRC’s guidance also covers particular cases such as some flat-management companies and unincorporated organisations.
Trading can include buying, selling, renting property, advertising, employing someone or receiving interest. Some preliminary activity, such as writing a business plan or negotiating contracts before a business begins, may not by itself make the company active for Corporation Tax, but the facts matter.
A company can therefore be dormant under one system but need attention under the other. Check both rather than using a single label across all records.
What should you know about tell HMRC?
If a company has not started trading, or has stopped and has no other income, tell HMRC that it is dormant for Corporation Tax. The online service asks for the company name, its 10-digit Unique Taxpayer Reference and, where relevant, the date trading stopped.
After HMRC records the company as dormant, it normally will not need another Company Tax Return unless HMRC asks for one or the company starts trading again. This does not cancel a notice already issued. If HMRC has sent a notice to deliver a return, the company generally needs to submit the return for that period unless HMRC confirms otherwise.
Where a company traded for part of a period and then became dormant, complete the return and pay any tax for the active period. Tell HMRC the cessation date accurately.
What should you know about accounts still go to Companies House?
Every limited company files accounts, whether it trades or not, unless a specific statutory exemption applies. A dormant company that also qualifies as small can normally file dormant accounts and may claim audit exemption.
Dormant accounts are simpler, but they are still formal accounts. Companies House guidance says unaudited dormant accounts include a balance sheet with the required statements and director signature, comparative figures where relevant, and specified notes. They do not need a profit and loss account or directors’ report for the Companies House filing.
The ordinary filing dates still apply. First accounts are generally due 21 months after incorporation; later private-company accounts are normally due nine months after the financial year ends. Dormancy is not a ground for ignoring the deadline and is unlikely, by itself, to support an appeal against a late filing penalty.
What should you know about the confirmation statement still applies?
A dormant company must file a confirmation statement at least once every 12 months and within 14 days after the review period ends. The statement checks the registered office, officers, people with significant control, business classification, shares and other register information.
The digital annual fee is currently £50, charged with the first statement in the 12-month payment period. Current directors also need to comply with identity-verification requirements and provide their Companies House personal codes through the relevant confirmation-statement process.
If nothing has changed, the company still files to say the record is correct.
What should you know about vAT and PAYE need separate closure decisions?
If a dormant company is VAT registered and does not intend to trade again, GOV.UK says it must deregister for VAT within 30 days of becoming dormant. If it expects to restart, it may keep the registration but must continue sending nil VAT Returns while dormant.
Do not stop filing VAT Returns merely because the company has told HMRC it is dormant for Corporation Tax. VAT is a separate registration with its own obligations and penalties.
If the company employs people and does not plan to restart in the current tax year, it should close its PAYE scheme. Complete the required final payroll reports. Again, Corporation Tax dormancy does not automatically close payroll.
What should you know about banking, costs and the risk of accidentally becoming active?
Review every bank movement before claiming dormant status. Bank charges, interest, subscriptions, insurance, professional fees and payments for services may create accounting entries that are not among the limited disregarded transactions for Companies House dormancy.
The safest approach is to avoid unnecessary transactions through a company intended to remain dormant. Keep records of the incorporation share payment and permitted Companies House fees. If any other transaction occurs, assess it before filing dormant accounts.
A company set up to hold an asset may also receive income or incur expenses. HMRC’s Corporation Tax guidance contains nuances for non-trading and asset-holding companies, so do not rely on the everyday meaning of “dormant”.
What should you know about restarting the company?
When a dormant company starts business activity, tell HMRC by adding Corporation Tax services and giving the trading start date. The Corporation Tax accounting period starts according to the tax rules, which may not align neatly with the Companies House financial year.
Companies House does not require a separate notice simply to say the company has restarted. The next set of non-dormant accounts will show the change. The company may also need to register or re-register for VAT, set up PAYE before paying employees, and begin proper accounting records from the start date.
Record the first tax payment and return dates as soon as the accounting period is known. A delayed start can create a dormant period and a trading period that require different tax treatment within one Companies House accounts period.
What should you know about keeping or closing a dormant company?
A company can remain dormant for as long as its owners want, provided its continuing obligations are met. Keeping it may make sense where a name, structure or future project is worth retaining. It still brings annual filings, fees, record keeping and director responsibility.
If the company is no longer needed, consider formal voluntary strike-off, liquidation where appropriate, or professional advice on the correct closure route. Before applying for strike-off, settle liabilities, deal with assets, close registrations and understand what will happen to anything left in the company.
What should you know about a simple annual checklist?
Check the bank and accounting records for significant transactions. Confirm Companies House and HMRC dormancy separately. File the accounts and confirmation statement, complete identity verification, monitor the registered office and deal with any HMRC notice.
Use the Deadline Finder for standard first accounts, first confirmation statement and Corporation Tax dates. For VAT, payroll, personal tax and other obligations, check the tax deadlines calendar and your official records.
What should you read next?
Use the Deadline Finder for standard first accounts, first confirmation statement and Corporation Tax dates. For VAT, payroll, personal tax and other obligations, check the tax deadlines calendar and your official records.
What do people also ask about this topic?
What should you know about dormant for Companies House?
Companies House treats a company as dormant for a financial year when it has had no significant accounting transactions. A significant transaction is one that should be entered in the company’s accounting records.
What should you know about dormant for Corporation Tax?
HMRC uses its own test. A company is usually dormant for Corporation Tax if it has stopped trading and has no other income, or if it is newly incorporated and has not started trading. HMRC’s guidance also covers particular cases such as some flat-management companies and unincorporated organisations.
What should you know about tell HMRC?
If a company has not started trading, or has stopped and has no other income, tell HMRC that it is dormant for Corporation Tax. The online service asks for the company name, its 10-digit Unique Taxpayer Reference and, where relevant, the date trading stopped.
What should you know about accounts still go to Companies House?
Every limited company files accounts, whether it trades or not, unless a specific statutory exemption applies. A dormant company that also qualifies as small can normally file dormant accounts and may claim audit exemption.
Which official sources support this guide?
- https://www.gov.uk/dormant-company/dormant-for-companies-house
- https://www.gov.uk/dormant-company/dormant-for-corporation-tax
- https://www.gov.uk/tell-hmrc-your-company-is-dormant-for-corporation-tax
General guidance, not advice for your situation.
