Home / Blog / Dormant Company: Filing Requirements and Tax Explained
Last updated 23 October 2026. Written by the Limited Company Accountant UK team, part of Accotax. Figures are for the 2026/27 tax year; always check GOV.UK for the latest rates.
Short answer: A company is dormant if it has no significant accounting transactions in the period, though small costs like Companies House fees do not count. A dormant company must still file annual dormant accounts and a confirmation statement with Companies House, and tell HMRC so that Corporation Tax filings can be stopped or simplified.
Key facts
| Companies House test | No significant accounting transactions |
|---|---|
| Annual filings | Dormant accounts and confirmation statement |
| HMRC position | Tell HMRC if the company is dormant for tax |
| Cost to keep | Confirmation statement fee of £50 a year |
| Strike off option | Possible if no longer needed |
- What dormant means
- Dormant for Companies House versus HMRC
- What you must still file with Companies House
- Late filing penalties still apply
- Can a dormant company have a bank account?
- Reasons to keep or close a dormant company
- Restarting a dormant company
- Dormant accounts: what they look like
- Common traps with dormant companies
- Dormant company checklist
- Directors’ duties while the company is dormant
- Frequently asked questions
What dormant means
A company is called dormant when it is not trading and has no other significant income or expenses. Companies House defines a dormant company as one that has had no significant accounting transactions during the financial year. Transactions that are not significant include paying the fee for filing a confirmation statement, the cost of incorporation and the payment for shares when the company was formed.
A dormant company can be one that was never used, a company kept for a name, one waiting for a new project, or one that has stopped trading but not yet closed. Being dormant is not the same as being closed, because the company still exists and has legal duties.
Dormant for Companies House versus HMRC
The tests differ between Companies House and HMRC, and a company can be dormant for one but not the other. For Companies House, the test is whether there are any significant accounting transactions. For HMRC, the question for Corporation Tax is whether the company is trading or has any other income, such as bank interest or property income, that is taxable.
If your company is dormant for Corporation Tax, you should tell HMRC. HMRC may then stop issuing returns, or you may still need to file a nil return if they send a notice. If the company receives interest or other income, it is no longer dormant for tax, even if there is no trading.
What you must still file with Companies House
A dormant company must file two things each year. The first is a set of annual accounts, which can be in the simplest form, called dormant accounts. These are short and show that the company has had no significant activity. They are filed online, often using a free service from Companies House.
The second is the confirmation statement, which must be filed at least once every 12 months, whether or not the company is dormant. The fee is £50 online. Failing to file either document can lead to penalties and, ultimately, to the company being struck off.
Late filing penalties still apply
Dormant companies are not exempt from late filing penalties. The automatic penalty for late accounts starts at £150 and rises to £1,500 for more than six months’ delay, and it doubles if you are late two years in a row. That is a heavy price for a company with no activity.
Prosecution is also possible for persistent failure to file. If you do not want to keep the company, it is usually better to close it than to ignore the filings.
Can a dormant company have a bank account?
Yes, a dormant company can keep a bank account, but be careful, because transactions can make the company non-dormant. Paying in funds, paying bills or earning interest above a small level could count as significant accounting transactions. If the account earns interest or you move money in and out, you should check whether the company is still dormant.
Many dormant companies close the bank account to avoid bank fees and keep the accounts simple. If you do want to keep it, consider an account with no monthly fees.
Reasons to keep or close a dormant company
There are good reasons to keep a dormant company, such as protecting a company name, preparing for a future project, or holding a valuable licence. The cost is small, around £50 a year for the confirmation statement, plus the time to file dormant accounts.
If there is no clear purpose, closing the company is often the better choice. Striking off costs £13 and removes the need for further filings, though you must follow the rules and settle any debts first. Think about which route suits you.
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Restarting a dormant company
If you plan to start trading again, tell HMRC as soon as the company becomes active and register for Corporation Tax if you have not already done so. Check that the registered office, directors and PSC details are up to date, and decide whether you need to register for VAT or PAYE.
The first accounts after restarting will be full accounts, not dormant accounts, so prepare for the extra work. An accountant can help you plan the restart and bring your filings up to date.
Dormant accounts: what they look like
Dormant accounts are simple. They consist of a balance sheet showing the company’s share capital and nothing else, a brief notes page, and a directors’ statement that the company has been dormant throughout the period. Companies House offers a free service to prepare and file them online, and your accountant can do it for a small fee.
You do not need an audit, and the accounts are not complicated. The main task is to confirm that no significant transaction took place in the year, which means checking the bank statements and any accounting records.
Common traps with dormant companies
Some traps catch people out. Paying an accountant’s fee from the company account can be a significant transaction. Receiving bank interest can create taxable income. Using the company to hold a domain name or licence can create small costs that make it non-dormant. And forgetting that a company that has stopped trading is not necessarily dormant, because there may still be final tax returns to file and assets to deal with.
If in doubt, ask your accountant to confirm the company’s status before you file dormant accounts. Filing the wrong type of accounts can cause delays and penalties.
Dormant company checklist
To keep a dormant company in good order, work through a short list each year. Confirm that no significant transactions occurred. File dormant accounts and the confirmation statement on time. Make sure HMRC knows the company is dormant for tax. Keep the registered office and director details up to date. Review whether the company still has a purpose. If you decide it does not, plan to close it properly rather than leaving it to be struck off for non-compliance. A few minutes a year is enough, and it protects both the company and its directors from avoidable penalties.
Directors’ duties while the company is dormant
Directors keep their legal duties even when a company is not trading. They must make sure the company files its accounts and confirmation statement on time, keep the registers up to date, and avoid allowing the company to become insolvent without taking advice. If a creditor emerges, the director must deal with it properly. Dormancy does not mean the director can stop paying attention, and a missed filing can still lead to fines or strike-off.
The bottom line
A company is dormant if it has no significant accounting transactions in the period, though small costs like Companies House fees do not count. If you would rather not do it alone, our fixed fees start at £45.83 + VAT a month.
Frequently asked questions
What is a dormant company?
A company with no significant accounting transactions in the financial year. Payments such as the confirmation statement fee do not count.
Do dormant companies have to file accounts?
Yes. They must file dormant accounts with Companies House each year, and also a confirmation statement.
Do dormant companies pay Corporation Tax?
Generally no, as long as there is no taxable income. You should tell HMRC, and file a return if they ask for one.
Can a dormant company be struck off?
Yes. You can apply to strike it off the register using form DS01 and a £13 fee, provided you meet the conditions such as having no outstanding debts.
How much does it cost to keep a dormant company?
About £50 a year for the confirmation statement, plus any accountancy fees for the dormant accounts.
Can a dormant company become active again?
Yes. When it starts trading, tell HMRC, register for any taxes you need, and file full accounts for the next financial year instead of dormant accounts.
Do I still need an accountant for a dormant company?
Not always, because dormant accounts are simple and can be filed by the directors. An accountant is useful if you are unsure whether the company is truly dormant, or if you want help restarting or closing it.
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