Accounts & dormancy

Is my company actually dormant?

"Dormant" has a strict legal meaning, and a single transaction can break it. Tick anything your company did this year to see where you really stand — at Companies House and at HMRC.

In this financial year, did the company…

Ignored on purpose: shares taken on formation, Companies House fees, and late-filing penalties — none of these break dormancy.

Your result

Dormant — the simple path

With no significant transactions, your company is dormant. You can file the short dormant accounts at Companies House and tell HMRC it's dormant so no Company Tax Return is needed.

  1. 1.File dormant accounts (AA02) at Companies House by your deadline
  2. 2.Tell HMRC the company is dormant for Corporation Tax
  3. 3.File your confirmation statement — dormancy doesn't exempt you from that

What actually breaks dormancy

The test is significant accounting transactions — entries that would appear in the company's accounting records. The law forgives exactly three: the shares subscribers take when the company is formed, fees paid to Companies House, and late-filing penalties. Everything else counts.

Bank interest is the usual dormancy-killer

Leaving the company's cash in an interest-bearing account quietly earns taxable income. A few pounds of interest keeps the company within the charge to Corporation Tax even when nothing else has happened — the single most common reason a "dormant" company still owes HMRC a return.

Two separate tests

Companies House and HMRC each decide dormancy their own way. You can be dormant for your accounts and still be active for Corporation Tax. Clearing one doesn't clear the other, which is why a "dormant" company can still collect a £100 penalty for a CT600 it didn't know it had to file.

Common questions

What makes a company dormant?

A company is dormant if it has had no 'significant accounting transactions' in the period. Three things are ignored: shares taken by subscribers when the company was formed, fees paid to Companies House, and penalties for late filing. Almost anything else — a sale, an expense, wages, even a few pounds of bank interest — breaks dormancy.

Can a company be dormant for accounts but not for tax?

Yes, and it's the classic trap. A company can be dormant for Companies House accounts while still being within the charge to Corporation Tax — most often because of bank interest. Companies House dormancy and HMRC dormancy are tested separately.

Does a dormant company still have to file anything?

No. A dormant company still has to file a confirmation statement every year and keep its registered details up to date. Dormancy only reduces what's in your accounts and, usually, removes the Corporation Tax return — it doesn't switch off your Companies House obligations.

General information about UK company dormancy, not tax advice. Complex cases — groups, property companies with pre-letting costs — can turn on detail; check yours against HMRC guidance. More filing guides.