“Dormant” is a statutory term with a legal test behind it. “Non-trading” is a description of what a company is doing — and it is not a filing status at either Companies House or HMRC.
Conflate the two and you file the wrong things. A non-trading company can still owe Corporation Tax, still owe a Company Tax Return, and still be barred from filing dormant accounts. Directors who assumed “we stopped trading, so we’re dormant” are the single largest source of avoidable penalties in this area.
Here is the distinction, and what each state actually requires you to file.
Companies House is binary. HMRC is not.
Companies House has two states: dormant or not dormant. A company is dormant during any period in which it has had no significant accounting transaction — one it should enter in its accounting records (Companies Act 2006, s1169). There is no third category and no de minimis. There is no such thing as a “non-trading company” for Companies House filing purposes.
HMRC has three. Its Corporation Tax test is not about trade at all — it is about whether the company is within the charge to Corporation Tax. That produces three positions:
| HMRC position | What it means | CT600 due? |
|---|---|---|
| Active | Carrying on a business activity, trading, providing services | Yes |
| Within the charge but not trading | Not trading, but earning interest, managing investments, receiving rent or any other income | Yes |
| Dormant | Not active, not liable for Corporation Tax, or not within the charge to Corporation Tax | No, unless a notice to deliver has been issued |
The middle row is the one nobody expects. HMRC’s own list of what makes a company active for Corporation Tax includes earning interest, managing investments and receiving any other income alongside trading. Stop trading, leave £80,000 in a company deposit account, and the company is not trading — but it is squarely within the charge to Corporation Tax on the interest, and a Company Tax Return is due.
Companies House has a SIC code for both — and they are different
This is the clearest evidence that the two words mean different things. The condensed SIC code list Companies House publishes contains:
- 99999 — Dormant Company
- 74990 — Non-trading company
Companies House is explicit that even a dormant or non-trading company must supply the appropriate code. Choosing 99999 while filing accounts showing transactions, or 74990 while filing dormant accounts, is an internal contradiction sitting on the public record.
The SIC code is a label, not the test. What you file is determined by the transactions in the year and the income in the period — not by the code you picked at incorporation and never revisited.
The four combinations
| Situation | Companies House | HMRC |
|---|---|---|
| Trading normally | Not dormant | Active |
| Stopped trading, company bank account closed, zero transactions | Dormant | Dormant |
| Stopped trading, no income, but the bank charges a monthly fee | Not dormant | Dormant |
| Stopped trading, earning bank interest or rent | Not dormant | Active — within the charge |
Rows three and four are where the money goes. In row three the director files dormant accounts because HMRC agreed the company was dormant — but Companies House sees significant accounting transactions and the accounts do not comply. In row four the director files nothing with HMRC because the company “isn’t trading” — but interest is income, and the return was due.
HMRC decides its own position on Corporation Tax dormancy, so treat the right-hand column as the likely outcome rather than a guaranteed one.
What each state actually requires
| Filing | Dormant for Companies House | Not dormant for Companies House |
|---|---|---|
| Annual accounts | Dormant accounts — balance sheet with the required statements, no profit and loss account, no directors’ report | Full micro-entity or small company accounts, prepared to the applicable standard |
| Confirmation statement | Required, every 12 months | Required, every 12 months |
| Filing fee for accounts | Free | Free |
| Filing | Dormant for Corporation Tax | Within the charge (trading or not) |
|---|---|---|
| Company Tax Return (CT600) | Not required once HMRC accepts dormancy — unless a notice to deliver has been issued | Required |
| Corporation Tax | None | Payable on trading profits, investment income and chargeable gains |
| Notification | You must tell HMRC | You must tell HMRC within 3 months of the accounting period starting |
Note what does not change in either table: the confirmation statement is due every year regardless, and full statutory accounts still go to the company’s members even where a dormant balance sheet is all that reaches Companies House.
Where the penalty comes from
Filing dormant accounts for a company that was not dormant. The accounts do not meet the Companies Act requirements. Companies House can reject them, and rejection is not a filing. If your deadline passes before compliant accounts are accepted, the automatic late filing penalty applies — £150 for a private company up to a month late, rising to £1,500 beyond six months, and doubled if you filed late in the previous financial year too. Being dormant, or believing you were, is not a reasonable excuse; Companies House lists it explicitly among the appeals unlikely to succeed.
Not filing a CT600 because the company “wasn’t trading”. The flat-rate late filing penalties for Company Tax Returns doubled for returns with a filing date on or after 1 April 2026 — the first increase since 1998. £200 the day it is late and a further £200 at three months, or £1,000 each where it is the third successive late return. The tax-related penalties did not change: a tax determination plus 10% of unpaid tax at six months, and a further 10% at twelve. The flat-rate penalties apply even where there is no tax to pay, and the six-month determination cannot be appealed. HMRC also states that a company which has not told HMRC it is dormant is still required to submit a return.
The mismatch fee. In practice the expensive scenario is not one big error — it is a company sitting in row three or four above for several years, filing dormant accounts and nothing else, until Companies House rejects a set of accounts or HMRC issues a notice to deliver covering four open periods at once.
VAT and PAYE follow the same logic
Neither regime cares what you call the company.
VAT. If you do not intend to trade again, you must cancel the VAT registration within 30 days of the company becoming dormant. If you plan to restart, you keep the registration and file nil returns throughout — under Making Tax Digital, like every other return.
PAYE. If you do not plan to restart trading in the same tax year, HMRC’s guidance is to close the PAYE scheme. Leaving it open with no submissions generates filing notices for returns nobody is preparing.
Frequently asked questions
Is a non-trading company the same as a dormant company?
No. Dormant is a legal test — no significant accounting transactions for Companies House, and not within the charge to Corporation Tax for HMRC. Non-trading just describes what the company is doing. A non-trading company that earns bank interest is not dormant for Corporation Tax, and a non-trading company that pays a bank charge is not dormant for Companies House.
Does a non-trading company have to file a Company Tax Return?
Yes, if it is within the charge to Corporation Tax. HMRC treats earning interest, managing investments and receiving any other income as being active for Corporation Tax purposes, even where there is no trade. A return is also due whenever HMRC has issued a notice to deliver one.
What SIC code should a non-trading company use?
Companies House uses 74990 for a non-trading company and 99999 for a dormant company. They are different codes on the condensed SIC list, and you must supply one even if the company is doing nothing.
What happens if I file dormant accounts when the company was not dormant?
The accounts do not comply with the Companies Act. Companies House can reject them, and if your filing deadline passes before corrected accounts are accepted, the company gets an automatic late filing penalty starting at £150.
Can a company be dormant for Companies House but not for HMRC?
Yes. A company with no transactions in its accounting records at all is dormant for Companies House, but if HMRC has issued a notice to deliver a Company Tax Return, or the company has income HMRC treats as bringing it within the charge, HMRC’s position is different. The two tests are decided separately.
Getting the classification right
The question that decides everything is not “did we trade?” It is “did anything move through this company, and did anything come in?” Those are two different questions, answered by two different regulators, with two different penalty regimes behind them.
SmartFiling handles dormant and non-trading company filings on a fixed fee, including the classification, the right account type, the confirmation statement and the HMRC position. Every filing is reviewed and signed off by an ICAEW Chartered Accountant, and everything is done online.
