Glossary

Non-trading company

Krishna Prasad Dahal, Chartered Accountant

Reviewed by Krishna Prasad Dahal FCCA, ACA (ICAEW), FCA (ICAI India)ICAEW Council Member · Last reviewed

Definition

A non-trading company is a limited company that has stopped trading, or has not started yet, but still has some financial activity, such as bank interest, rental income or paying expenses. “Non-trading” is a description, not an official filing status. Unlike a dormant company, a non-trading company may still need to file a Company Tax Return (CT600), and it cannot file dormant accounts if it has significant transactions.

Why the difference matters

  • HMRC: a company that receives income, such as interest or rent, is active for Corporation Tax even if it does not trade. It normally files a CT600 and pays tax on that income.
  • Companies House: any significant accounting transaction, such as paying expenses from the company bank account, means the company is not dormant. It files normal accounts, often micro-entity accounts, instead of dormant company accounts.

A company can therefore be dormant for HMRC but not for Companies House, for example if it has no income but still pays a few expenses.

Example

A company that stopped trading in 2025 but still earns £300 a year of bank interest is non-trading, not dormant. It normally files micro-entity accounts at Companies House and a CT600 reporting the interest.

SmartFiling compares dormant vs non-trading companies with more examples, and its dormant company accounts service covers companies that do qualify as dormant.

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