Dormant companies and associations

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1. Overview

Your company or association may be ‘dormant’ if it’s not doing business (‘trading’) and doesn’t have any other income, for example investments.

Dormant means different things for:

2. Dormant for Corporation Tax

Your company is usually dormant for Corporation Tax if it:

Trading includes buying, selling, renting property, advertising, employing someone or getting interest. HMRC has detailed guidance on what counts as dormant for Corporation Tax.

When HMRC thinks your company is dormant

You may get a letter from HMRC telling you:

  • they’ve decided to treat your company or association as dormant
  • that you don’t have to pay Corporation Tax or file Company Tax Returns

When you think your company is dormant

If your company has stopped trading and has no other income, you can tell HMRC that it’s dormant for Corporation Tax.

If you’ve filed a Company Tax Return or had a ‘notice to deliver a Company Tax Return’

You’ll still need to file a Company Tax Return online - this will show HMRC that your company is dormant for this period.

Limited companies

You don’t need to pay Corporation Tax or file another Company Tax Return once you’ve told HMRC your company is dormant unless you receive a further notice to deliver a Company Tax Return.

You must still file annual accounts and a confirmation statement (previously annual return) - exactly what you must do depends on if you’re dormant for Companies House.

Find out how to restart your company.

If you’re registered for VAT

If you do not intend to trade again you must deregister for VAT within 30 days of your company becoming dormant.

However, if you plan to restart trading, you must send ‘nil’ (empty) VAT returns while your company is dormant.

If you employ people

If you do not plan to restart trading in this tax year, you should close your PAYE scheme.

3. Dormant for Companies House

You must file your confirmation statement (previously annual return) and annual accounts with Companies House even if your limited company is:

But if your company is dormant according to Companies House and also qualifies as ‘small’ you:

  • can file ‘dormant accounts’ instead
  • don’t have to include an auditor’s report with your accounts

Check what to include in your accounts if your company is small and dormant for Companies House.

Dormant according to Companies House

Your company is called dormant by Companies House if it’s had no ‘significant’ transactions in the financial year.

Significant transactions don’t include:

  • filing fees paid to Companies House
  • penalties for late filing of accounts
  • money paid for shares when the company was incorporated

You do not need to tell Companies House if you restart trading. The next set of non-dormant accounts that you file will show that your company is no longer dormant.