Two definitions of dormant
| Companies House | HMRC (Corporation Tax) | |
|---|---|---|
| Dormant means | No significant accounting transaction in the financial year2 | Not trading and no other income, such as investments1 |
| Ignored | Shares taken by the subscribers at formation; fees for changing name, re-registering or the confirmation statement; late filing penalties2 | n/a |
| Breaks dormancy | Any transaction the company must record in its accounting records2,3 | Buying, selling, renting property, advertising, employing someone or getting interest1 |
| What you file | Dormant accounts if the company is also small, and no auditor’s report1 | Nothing, once you’ve told HMRC, unless you get a notice to deliver a return1 |
A company can be dormant for one and not the other. A company that only earns bank interest is not dormant for HMRC, because HMRC counts getting interest as trading1.
What breaks dormancy for Companies House
The law defines a significant accounting transaction as one the company must enter in its accounting records2. Those records must include “all sums of money received and expended by the company”3. The only exceptions are the ones in the table: the subscribers’ share money, a few Companies House fees and late filing penalties2.
So a bank charge or a bank interest payment is a sum received or spent, and it is not on the list of exceptions. A company whose bank account charges a monthly fee or pays interest has had significant accounting transactions in that year2,3. If your company holds a bank account, check its statements before calling the year dormant.
What you still file every year
- Annual accounts to Companies House, 9 months after the year end, like every company. A company that is dormant for Companies House and qualifies as small can file simpler dormant accounts, with no auditor’s report1,4.
- A confirmation statement, at least once every 12 months. Dormant and non-trading companies must file one too7.
- A Company Tax Return only if HMRC asks. If you’ve filed a return before, or had a notice to deliver one, file a return showing the company is dormant for that period. After you’ve told HMRC the company is dormant, you don’t file another unless you get a further notice1.
Companies House also has a paper form for dormant accounts, AA02, for a company limited by shares that has never traded or whose only transaction was issuing the subscriber shares. It asks you to file online where you can, because paper takes longer to process8.
A worked example
A dormant company with a year end of 30 June 2026 files its dormant accounts by 31 March 2027. Its confirmation statement follows its own 12-month cycle: with a confirmation date of 15 February 2027, it is due by 1 March 20277. Filed late, the accounts carry the same automatic penalty as any company’s, from £150 up to £1,5006. Look up your own dates with the deadline checker.
Telling HMRC
If the company has stopped trading and has no other income, you can tell HMRC it is dormant for Corporation Tax. HMRC may also write to say it has decided to treat the company as dormant1. At the same time:
- VAT: if you don’t plan to trade again, deregister within 30 days of becoming dormant. If you do plan to restart, send nil VAT returns while dormant1.
- PAYE: if you don’t plan to restart trading in this tax year, close the PAYE scheme1.
When dormancy ends
You don’t tell Companies House: your next set of accounts that aren’t dormant shows it1. You do tell HMRC, by registering for Corporation Tax again through the company’s business tax account5. The Corporation Tax accounting period then starts on the day the company restarts business, while the Companies House year end can stay the same5. Accounts are due 9 months after the year end, the tax 9 months and 1 day after, and the return 12 months after5.
Dormant, or closed?
You can keep a company dormant for as long as you want, as long as it files its accounts and confirmation statement each year9. If it has no future, closing it ends those filings. See the ways to close a limited company.