Definition
A dormant company is a limited company that is not active, but Companies House and HMRC use different tests. Companies House treats a company as dormant if it had no significant accounting transactions in the financial year. HMRC treats it as dormant for Corporation Tax if it is not trading and has no other income, such as investment income. A dormant company must still file annual accounts and a confirmation statement.
What a dormant company still files
- Annual accounts at Companies House, usually simplified dormant company accounts, due 9 months after the year end
- A confirmation statement at least once every 12 months (£50 online)
- A CT600 only if HMRC sends a notice to deliver one
What does and does not break dormancy
Companies House ignores its own filing fees, late filing penalties and money paid for shares on incorporation when deciding whether there were significant transactions. For HMRC, buying, selling, renting out property, advertising, employing someone or receiving interest all make the company active. A company that only receives bank interest is therefore not dormant for Corporation Tax and is usually described as a non-trading company.
SmartFiling explains the HMRC and Companies House definitions of dormant in more detail, and its dormant company accounts service prepares and files the yearly dormant accounts.
Related questions
- Does a dormant company need to file a Company Tax Return? Only if HMRC sends a notice to deliver one; the return must then be filed, even though it shows the company was dormant.
- How much does it cost to keep a dormant company? Filing accounts at Companies House is free, but the confirmation statement costs £50 online each year.
Related terms
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Non-trading company
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…
Read definition -
Dormant company accounts
Dormant company accounts are the simplified annual accounts a dormant company files at Companies House, normally a balance sheet with a few notes and no profit and loss…
Read definition -
Confirmation statement
A confirmation statement (form CS01) is the filing in which a company confirms that the information Companies House holds about it is correct, such as its officers…
Read definition -
CT600
The CT600 is the Company Tax Return a UK company files with HM Revenue and Customs (HMRC) for each accounting period.
Read definition
