Last updated: 16 October 2026
When is a company dormant?
A company is dormant for Companies House purposes if it has no significant accounting transactions during the period. Paying the Companies House filing fee, penalties for late filing and money paid for shares when the company was formed don’t count. For corporation tax, HMRC treats a company as dormant if it isn’t carrying on any business activity, such as trading, receiving income or investing. A dormant company must still file a confirmation statement and annual accounts, but can usually stop filing tax returns once HMRC agrees.
What counts as a transaction?
| Doesn’t stop dormancy | Ends dormancy |
| Companies House fees | Bank interest received |
| Late filing penalties | Sales or invoices |
| Share capital paid on formation | Paying directors or staff |
| Shareholder loans to pay fees | Buying assets |
Dormant for HMRC
Tell HMRC the company is dormant using your business tax account or by writing. HMRC may then send no further CT600 notices. If you receive a notice to file, you must still file. Bank interest, even small amounts, means the company isn’t dormant for tax.
Filing requirements
- Annual accounts: dormant companies can file simplified dormant accounts (AA02)
- Confirmation statement every year (£50 online from February 2026)
- Corporation tax returns only if HMRC asks
- Identity verification for directors and people with significant control from November 2025
Why keep a dormant company?
- To protect a company name
- For a future business plan
- As a holding company before it trades
Example
Jo forms a company in March 2026 to protect a brand name. The only transactions are the incorporation fee and £1 for shares. She files AA02 dormant accounts and a confirmation statement each year. In 2027 she opens a bank account and starts trading, so she tells HMRC the company is now active within three months.
Restarting a dormant company
Tell HMRC within 3 months of starting business activity. Register for PAYE if paying salaries and for VAT if turnover exceeds £90,000.
Common mistakes
- Assuming no filings are needed
- Leaving interest-earning bank accounts open
- Missing the confirmation statement
- Ignoring HMRC notices to file
Records to keep
Keep the dormant accounts, confirmation statements and any HMRC letters about dormancy.
Dormant accounts content
Dormant accounts (AA02) show the balance sheet, usually just the share capital owed or paid, and statements that the company was dormant and exempt from audit. They are due 9 months after the accounting reference date, the same as trading company accounts, and late filing penalties start at £150 for private companies. Companies with any transactions in the period must file full or micro-entity accounts instead.
Frequently asked questions
Can a dormant company have a bank account?
Yes, if it earns no interest.
Does it need an accountant?
Not required, but useful.
Can I close it instead?
Yes, by applying to strike it off.
Is a dormant company exempt from audit?
Yes, in most cases, unless it is a public company or regulated firm.
Striking off
If you no longer need the company, apply to strike it off using form DS01 (£13 online, £18 on paper, from February 2026). It must not have traded in the last three months.
Related: confirmation statements, Companies House address rules and tax after a company closes.
Talk to Accotax
Want this handled for you? Our team at Accotax can help with dormant company filing. See our limited company accountants service, or contact us for a free, no-obligation quote.
This page is general guidance based on HMRC rules for the 2026/27 tax year, checked against gov.uk on 16 October 2026. It is not personal advice, so speak to an accountant about your own situation.
