If you own a UK-based company but aren’t actively trading, you may need to maintain its dormant status. A dormant company is one that has had no significant accounting transactions during the financial year. However, even though your company is inactive, it still has legal obligations to HMRC and Companies House.
Failing to comply with these requirements can lead to penalties, company dissolution, or even director disqualification. In this guide, we will walk you through how to keep your dormant company in good standing while ensuring full compliance with HMRC.
What is a Dormant Company?
A dormant company is a limited company that is not carrying out business activity or generating income. HMRC considers a company dormant if it has had no significant accounting transactions, meaning:
- No trading income or expenses
- No sales or business transactions
- No active payroll or wages paid
- No bank interest earned (except in special cases)
However, your company can still:
- Pay for Companies House filing fees
- Settle late filing penalties
- Pay for shares when the company was incorporated
A company may become dormant for various reasons, such as pausing business operations, preparing for future activities, or holding intellectual property.
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Why Would You Keep a Company Dormant?
Many business owners opt to keep a company dormant instead of closing it down entirely. Common reasons include:
- Future Business Plans – You may want to restart operations later.
- Protecting a Business Name – Keeping the company active prevents others from registering the same name.
- Holding Intellectual Property or Assets – Dormant companies can own trademarks, copyrights, or property.
- Easier than Re-registering – Closing and reopening a company can be time-consuming and costly.
While keeping a company dormant can be beneficial, you must ensure it remains compliant with all regulatory requirements.
Key HMRC and Companies House Requirements for Dormant Companies
Even though your company is not trading, you must still meet legal obligations to avoid penalties and fines.
Filing Dormant Company Accounts with Companies House
All dormant companies must file annual accounts with Companies House. The good news is that dormant companies can file “dormant accounts,” which are simpler than full accounts.
When to File:
- You must submit dormant accounts within nine months of your company’s financial year-end.
- For new companies, the first accounts must be submitted within 21 months of incorporation.
How to File:
- Online via the Companies House website
- Using accounting software
- Hiring an accountant
At Taxcan, our experienced accountants (AAT and ACCA certified) ensure your dormant accounts are filed correctly and on time.
Submitting a Confirmation Statement
Every UK company, whether dormant or active, must submit a Confirmation Statement (CS01) to Companies House at least once a year.
What Does It Confirm?
Your company’s:
- Registered office address
- Directors and shareholders
- SIC code (Standard Industrial Classification)
For a dormant company, you should use the SIC code 99999 (Dormant Company) to indicate non-trading status.
Deadline:
- Must be filed every 12 months
- Late submissions may lead to company dissolution
Informing HMRC That Your Company is Dormant
If your company was previously trading but is now dormant, you must inform HMRC by contacting your local Corporation Tax Office.
How to Notify HMRC:
- Online via your Government Gateway account
- By post using the “Corporation Tax: Dormant Company Notification” form
What Happens Next?
- HMRC will confirm your company’s dormant status
- You will no longer need to submit a Corporation Tax Return (CT600)
If HMRC has not acknowledged your company as dormant, they may still expect tax returns and issue penalties for non-filing.
Keeping a Registered Office Address
A dormant company must maintain an official registered office address in the UK.
- This address must be a physical location (not a PO Box)
- It must be accessible for official correspondence from HMRC and Companies House
You can use:
- Your home address
- A virtual office address
- An accountant’s registered address (Taxcan offers registered office services)
Avoiding Common Mistakes That Can Activate Your Dormant Company
Even a minor transaction can cause HMRC to classify your company as active, meaning you will need to file full accounts and tax returns. To maintain dormancy:
- Avoid bank transactions (except paying Companies House fees)
- Do not pay salaries or dividends
- Do not earn income or accept payments
If you accidentally receive money into your business account, refund it immediately and notify HMRC.
What Happens If You Fail to Meet Compliance?
Ignoring your dormant company’s legal obligations can have serious consequences, including:
- Late filing penalties (starting at £150 and increasing up to £1,500)
- Company strike-off (forced removal from the Companies House register)
- Director disqualification (if you repeatedly fail to meet obligations)
To avoid these risks, many business owners hire a professional accounting firm like Taxcan, ensuring full compliance without stress.
How Taxcan Can Help
At Taxcan, we specialise in providing expert accounting and tax advisory services tailored to your business needs. Our team consists of AAT and ACCA-qualified professionals, ensuring you receive the best financial guidance.
- Dormant Company Filing – We handle your annual accounts and confirmation statement
- HMRC Notifications – We inform HMRC of your dormant status
- Registered Office Services – Keep your company compliant with a professional address
- Business Advisory – Strategic financial advice to help you plan for the future
With Taxcan, you can relax knowing your dormant company remains fully compliant while you focus on what is next for your business.
Need help? Contact Taxcan today for expert guidance on managing your dormant company.
Keeping your company dormant is not just about avoiding tax—it is about maintaining compliance with UK regulations. By filing the correct documents, notifying HMRC, and avoiding accidental transactions, you can keep your company in good standing without unnecessary stress.
If you want expert help with managing your dormant company, reach out to Taxcan. Our experienced accountants will ensure your business stays compliant, hassle-free.
Stay compliant and stay stress-free—let Taxcan handle your dormant company obligations.