Dormant company accounts: what do you need to file?

If your limited company isn’t trading, you might assume there isn’t much paperwork to worry about.

Unfortunately, that isn’t necessarily the case. Even if your company is dormant, you’ll normally still need to file annual accounts with Companies House. You’ll also need to submit a confirmation statement at least once a year.

There’s another complication. Companies House and HMRC use different rules to decide whether your company is dormant. So, before you decide what you need to file, you need to know which definition applies.

When is your company dormant?

For Companies House purposes, your company is dormant if it has had no significant accounting transactions during the financial year.

In simple terms, that means there has been nothing that normally needs to go into your accounting records.

Some transactions are ignored when Companies House decides whether your company is dormant. These include money paid for shares when you formed the company, certain Companies House fees and penalties for filing accounts late.

Other transactions can mean your company isn’t dormant. For example, if your company receives income or incurs ordinary business costs, these transactions will generally need to appear in your accounting records.

You can find the full Companies House definition on GOV.UK.

Does a dormant company need to file accounts?

Yes, in most cases.

All limited companies must file annual accounts with Companies House, whether they are trading or not. There are limited exceptions for some dormant subsidiaries, but simply stopping trading doesn’t remove your filing obligation.

If your company is dormant and qualifies as small, you can normally file simplified dormant company accounts.

These do not need to include a profit and loss account or a directors’ report. However, they will normally include a balance sheet, comparative figures from the previous year and certain notes.

Your balance sheet also needs the required statements confirming that your company was dormant and, where appropriate, that it qualifies for audit exemption.

Companies House has detailed guidance on dormant company accounts.

When do you need to file dormant company accounts?

Being dormant doesn’t give you extra time to file.

If you run a private limited company, your annual accounts will normally be due nine months after the end of your financial year.

Different rules apply to your first accounts. For many new private companies, these are due 21 months after incorporation.

You can check your exact deadline by looking up your company on the Companies House register.

Don’t leave your filing until the last minute. The same late filing penalties apply to dormant companies as they do to trading companies.

Can you file dormant company accounts yourself?

In some cases, yes.

If your company has never traded, you can currently file dormant accounts using the Companies House online service. If it has never traded since incorporation, you can also use paper form AA02.

The position is different if your company traded in the past and subsequently became dormant. Form AA02 isn’t suitable in this situation, so you’ll need to prepare appropriate dormant accounts.

It’s worth checking your company’s history carefully before you file. A company that has stopped sending invoices isn’t automatically dormant if other transactions have continued to pass through it.

Is a dormant company the same for Corporation Tax?

Not necessarily.

HMRC normally treats your company as dormant for Corporation Tax if it has stopped trading and has no other income. A new company that hasn’t started trading will also usually be dormant.

HMRC’s definition of activity can be wider than you might expect. Trading can include buying and selling goods, renting property, advertising, employing someone or receiving interest.

You can read HMRC’s guidance on being dormant for Corporation Tax.

If your company has stopped trading and has no other income, you should tell HMRC that it is dormant.

If HMRC has already issued you with a notice to file a Company Tax Return, you’ll still need to complete that return for the relevant period. Once HMRC has been told your company is dormant, you won’t normally need to file further Company Tax Returns unless it asks you to.

Your Companies House obligations continue. You’ll still normally need to file dormant company accounts and your annual confirmation statement.

What about VAT and PAYE when your company becomes dormant?

You may have other jobs to do if your company stops trading.

If your company is VAT registered and you don’t intend to trade again, HMRC says you must cancel your VAT registration within 30 days of becoming dormant. If you plan to restart, you’ll normally need to continue filing nil VAT returns while you aren’t trading.

If you employ people and don’t plan to restart trading during the current tax year, you should also close your PAYE scheme.

These rules are separate from your dormant company accounts, so don’t assume that telling one government body automatically deals with everything else.

What happens when you start trading again?

If you start trading again, you don’t need to tell Companies House separately that your company is no longer dormant. The next set of accounts you file will show that its status has changed.

You will, however, need to tell HMRC that your company is active again for Corporation Tax.

You’ll also need to make sure your bookkeeping restarts from the date activity begins. This is particularly important if your company starts incurring costs before its first new sale.

Are the rules for dormant company accounts changing?

There is one future change worth preparing for.

From 1st April 2028, all UK companies will have to file their accounts with Companies House using commercial software. The existing web and paper routes for filing accounts will close.

This applies to dormant companies too.

If you currently prepare and file your own dormant company accounts, you’ll therefore need suitable software by the time the new rules begin. Alternatively, you can ask your accountant to prepare and file them for you.

Need help with your dormant company accounts?

A dormant company may not be trading, but you still have legal filing responsibilities to keep on top of.

Problems often arise when you assume that because nothing much has happened, nothing needs to be filed. You can then find yourself facing a late filing penalty or discover that a transaction means your company doesn’t qualify as dormant after all.

THP’s annual accounts service can help you work out what you need to file and make sure your accounts reach Companies House on time.

If you’re unsure whether your company is genuinely dormant, or what you need to send to Companies House or HMRC, get in touch. We’ll be happy to help.