If your limited company has stopped trading or never started, you might think the filing obligations vanish. They do not. A dormant company still has legal and tax filing requirements. Ignoring them leads to late filing penalties, HMRC compliance checks, and potentially the company being struck off.

This article covers exactly what you must file, when, and how to keep your company compliant. We are ICAEW qualified accountants, and we deal with these questions regularly from business owners across Manchester, Bristol, and London.

What Is A Dormant Company For Companies House Purposes?

Companies House defines a company as dormant if it has no significant transactions during the accounting period. Significant transactions include any income, expenditure, or trading activity. The only exceptions are:

  • Payment for shares taken by subscribers to the memorandum of association.
  • Fees paid to Companies House for filing documents.
  • A penalty for late filing of accounts.

If your company had any other transactions, even a single invoice or bank interest payment, it is not dormant for Companies House purposes.

What Is A Dormant Company For HMRC Corporation Tax Purposes?

HMRC uses a slightly different test. A company is dormant for corporation tax if it has no income or chargeable gains. That means no trading income, no bank interest, no investment income, and no capital gains from asset sales.

The distinction matters. You can be dormant for Companies House but not for HMRC. For example, a company with £50 of bank interest is dormant for Companies House (if the interest is below the de minimis threshold and the company has no other transactions) but is not dormant for HMRC. You would still need to file a corporation tax return for that period.

What Must You File For A Dormant Company?

There are three main filing requirements. Miss any of them and you face penalties.

1. Dormant Company Accounts To Companies House

Every private limited company must file annual accounts with Companies House. A dormant company files what are called "dormant accounts". These are simplified accounts. They contain a balance sheet showing share capital and any other fixed assets or liabilities, but no profit and loss account.

The deadline is 9 months after your company's financial year end. For a company with a year end of 31 March, the accounts are due by 31 December. Late filing penalties start at £150 for a private company that is 1 month late, rising to £1,500 if more than 6 months late.

You can file dormant accounts online through the Companies House WebFiling service. Many accounting software packages like Xero or FreeAgent can generate them automatically if your company is correctly flagged as dormant.

2. Confirmation Statement To Companies House

The confirmation statement (form CS01) is separate from your annual accounts. It confirms that the information Companies House holds about your company is correct. This includes registered office address, director details, shareholder information, and people with significant control (PSC register).

You must file a confirmation statement at least once every 12 months. There is no exemption for dormant companies. The filing fee is £13 online or £40 by post. You can file it any time within the 12-month period from your last confirmation statement date.

3. Corporation Tax Return To HMRC

Even if your company is dormant for corporation tax purposes, you still have obligations to HMRC. You must tell HMRC that the company is dormant. You do this by filing a corporation tax return (form CT600) and marking it as dormant, or by writing to HMRC to confirm dormancy.

If you do not tell HMRC, they may assume the company is still trading and issue penalties for not filing a return. The penalty for a late CT600 is £100 for 1 day late, rising to £200 if 3 months late, with further penalties for longer delays.

The corporation tax return deadline is 12 months after the end of the accounting period. Payment of any tax due (if there is any) is due 9 months and 1 day after the year end.

What If Your Company Has Never Traded?

If you incorporated a company but never started trading, you still have the same filing obligations. You must file dormant accounts and a confirmation statement each year. You also need to tell HMRC the company is dormant.

Many people incorporate a company and then do nothing with it. That is fine, but you cannot ignore the filings. We see this often with contractors who incorporated but then took a permanent job, or with start-ups that raised money but never launched. The company remains on the register and must comply.

If you genuinely have no plans to use the company, you can apply to strike it off. But do not just walk away. The penalties will follow you.

What If Your Company Has Bank Interest Or Other Income?

Bank interest is the most common trap. A company that has been dormant for years suddenly receives £5 of interest on its bank account. That single transaction makes the company non-dormant for HMRC purposes.

You then need to file a full corporation tax return for that period. The interest is taxable at the corporation tax rate (19% or 25% depending on profit level). You also need to file full accounts to Companies House, not dormant accounts.

If the interest is very small, you might consider closing the bank account to avoid this. But if you keep the account open, you must monitor it and file accordingly.

What About VAT, Payroll, And Other Taxes?

A dormant company typically has no employees and no VAT taxable supplies. But if you previously had employees or were VAT registered, you still have obligations until you deregister.

If you are VAT registered and stop trading, you must deregister for VAT within 30 days of ceasing to make taxable supplies. The same applies to PAYE. If you had employees, you must file final payroll reports and issue P45s.

For most dormant companies, these registers will already be closed. But check. A VAT registration that is not cancelled still requires returns, even nil returns.

What Happens If You Do Not File?

The consequences escalate quickly. For Companies House, late filing penalties start at £150 for a private company. If you miss multiple years, the penalties compound. Companies House can also strike the company off the register, which means the company ceases to exist. That can cause problems if the company owns assets or has outstanding liabilities.

For HMRC, failure to file a corporation tax return can lead to daily penalties of £10 per day for up to 90 days, then further penalties of £500 or more. HMRC can also issue a tax determination, estimating the tax you owe, which you then have to challenge.

If you have been missing filings, act now. You can file late accounts and returns. The penalties may be reduced if you can show reasonable excuse, but the best approach is to avoid the problem entirely.

How To Keep Your Dormant Company Compliant

Here is a simple checklist for each year:

  • File dormant accounts to Companies House within 9 months of your year end.
  • File your confirmation statement within 12 months of the last one.
  • Tell HMRC the company is dormant (or file a dormant CT600).
  • Keep your company records up to date, including the register of members and PSC register.
  • Monitor bank accounts for any transactions that break dormancy.

If you use accounting software, set reminders. Xero and FreeAgent both have features to flag filing deadlines. You can also authorise your accountant to file on your behalf.

Can You Change Your Year End To Reduce Filings?

No. Changing your accounting reference date does not reduce the number of filings. You still file one set of accounts per year. The only exception is if you shorten a period to align with a new year end, but you still file for that shorter period.

Some companies try to extend their year end to delay the first filing. That works for the first year only. After that, you are on the standard cycle.

When Should You Strike Off A Dormant Company?

If you have no intention of using the company, striking off is often the simplest solution. You apply to Companies House using form DS01. The company must have no assets, no liabilities, and no outstanding filing obligations. If HMRC objects (for example, because tax is owed), the strike off will be blocked.

Striking off is not a way to avoid filing. You must be up to date with all filings before you apply. If you are behind, catch up first, then strike off.

For companies with assets or retained profits, striking off is more complicated. The assets pass to the Crown as bona vacantia. You would need to extract the value first, typically through dividends or a members' voluntary liquidation. That is a different process entirely.

What If You Want To Keep The Company For Future Use?

That is common. Many business owners keep a dormant company to protect the company name, to hold an asset like a domain name or intellectual property, or because they plan to restart trading later. That is fine. Just keep up with the filings.

If the company has no assets and no activity, the annual cost of compliance is minimal. The filing fees are £13 for the confirmation statement and nothing for the accounts (if you file online). The time cost is perhaps 30 minutes per year.

Compare that to the cost of late filing penalties, which can run into hundreds or thousands of pounds. The compliance is cheap. The non-compliance is expensive.

Do You Need An Accountant For A Dormant Company?

You can file dormant accounts and confirmation statements yourself. Many business owners do. But if you have any complexity, such as bank interest, previous trading, or a mix of dormant and active periods, an accountant saves you from mistakes.

As ICAEW qualified accountants, we handle dormant company filings for clients across the UK. We can set up reminders, file the returns, and handle any HMRC correspondence. If you want to keep your company dormant but compliant, get in touch. We can take the admin off your hands.

If you are considering incorporating a new company, read our guide on company incorporation to understand the full obligations from day one.

For more on the broader filing obligations of a limited company, see our limited company tax blog.