What is a dormant company?

In essence, it’s an inactive limited company which is not trading or receiving any income from investments. By trading, we mean that the company is not buying, selling, providing services or employing staff. Your accounts must not show any significant accounting transactions for the period.

This could be a company that stopped trading and is just a step away from closing down or has not started trading yet. You could be taking a break from trading, starting a dormant company to protect assets or perhaps you have a vision for a new business that you will action in the future.

If your company meets the criteria outlined by the HMRC, you can file for your accounts to be dormant from Corporation Tax, you also won’t have to file Company Tax return.  You will still have to file annual accounts and a confirmation statement depending whether or not you’re dormant for Companies House.

Here’s a great video from the Companies House showing you how to file your dormant accounts online:

If this is something you’d like more advice on, our team would be more than happy to help.

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