Dormant Company UK 2026: What You Must File With HMRC (and What You Can Ignore)

Quick answer

A dormant limited company is not the same as a deleted one. It still exists as a legal entity, and Companies House expects annual filings regardless of whether the company has traded. The two non-negotiable filings are the confirmation statement (formerly the annual return) and dormant company accounts. A CT600 corporation tax return is only required if HMRC has specifically issued a notice demanding one.

Neglecting these filings can result in late filing penalties of up to £1,500, and ultimately in the company being struck off the register — dissolved as if it never existed. Restoration is possible but expensive and time-consuming.

The two dormancy tests: Companies House vs HMRC

One of the most common points of confusion is that "dormant" means different things to Companies House and to HMRC. A company can be dormant under one definition but not the other.

Companies House definition

Under the Companies Act 2006, a company is dormant if it has had no significant accounting transactions during the accounting period. A significant accounting transaction is any transaction that needs to be entered in the company's books — receiving money, paying a supplier, paying an employee, making a bank transfer.

Importantly, the £34 confirmation statement fee paid to Companies House is specifically excluded from this definition. Paying it does not break dormancy.

HMRC Corporation Tax definition

HMRC treats a company as dormant for corporation tax purposes if it is not carrying on a trade or business and has no other sources of income (such as investment income or property income). The test is broader — it is about commercial activity, not just accounting entries.

Practical implication: A company holding a bank deposit earning interest may be dormant for Companies House purposes (no trading transactions) but not dormant for HMRC purposes (investment income). In that case, you would still need to file a CT600 reporting the interest income.

What you must file every year

1. Confirmation statement

The confirmation statement (formerly the annual return) confirms that the basic information Companies House holds about your company is correct: registered address, directors, shareholders, share capital, and SIC code.

• Deadline: Within 14 days of your "confirmation date" (which is typically the anniversary of incorporation, or the date of your last confirmation statement)
• Fee: £34 if filed online via the Companies House WebFiling service; £62 if filed on paper
• What to check: Confirm that the registered office address, director details, and shareholder information are all current. If anything has changed, update it at the same time.
• Consequence of missing it: Companies House will send warning letters and ultimately begin strike-off proceedings if the statement is more than 14 days overdue.

The confirmation statement is not about financial figures — it is purely a check on company information. Even a company that has done absolutely nothing in the past year still needs to confirm this.

2. Dormant company accounts (AA02)

Instead of full statutory accounts, a dormant company files simplified dormant company accounts using Companies House form AA02. These consist of a balance sheet showing the company's position on the last day of the accounting period, plus a statement confirming that the company has been dormant throughout the period.

• Deadline: 9 months after the end of the accounting period. For a new company's first accounts, the deadline is 21 months from the date of incorporation.
• Filing fee: Free when filed online via Companies House WebFiling
• Who prepares them: You can prepare and file dormant company accounts yourself — the format is simple. However, many directors pay an accountant (typically £50–£200) to do this for reassurance.
• What's included: A basic balance sheet showing the initial share capital (e.g., £1 or £100 paid-up shares), any loans from directors, and the net position. No profit and loss account is needed for a dormant company.

3. CT600 corporation tax return — when it IS required

You are only required to file a CT600 if HMRC has issued a Notice to Deliver a Company Tax Return (form CT603). If you notified HMRC of dormancy when the company first became dormant and HMRC accepted this, no further CT600 is required — unless HMRC later issues a CT603.

When HMRC issues a CT603 to a dormant company:

• At or near the time of incorporation (HMRC automatically issues a CT603 to new companies)
• If HMRC has reason to believe the company may have traded
• If the company had previously been active and filed returns

If you receive a CT603, you must file a CT600 for that period. The return will show all zeros — zero income, zero expenditure, zero tax — but it must be filed by the deadline (12 months after the end of the accounting period). You can file online using HMRC's free CT600 software or commercial software.

How to notify HMRC of dormancy: Write to your Corporation Tax office (the address is on any HMRC letters you have received) stating that the company became dormant on a specific date and is no longer carrying on any trade or business. HMRC will acknowledge this and should not issue further CT603s until the position changes.

Filing deadlines and penalties

Missing deadlines has serious consequences. Here is a summary of the penalty structure:

Companies House late accounts penalties (England, Wales, Scotland)

These penalties double if your company files late accounts two years in a row.

Strike-off for persistent non-filing

If a company consistently fails to file confirmation statements or accounts, Companies House will send a series of warning letters and then publish a notice in the Gazette that the company is to be struck off. If no action is taken within two months, the company is dissolved. All assets belonging to the company at that point become bona vacantia — they pass to the Crown (in practice, the Treasury Solicitor), not to the shareholders.

This is a serious risk for companies that hold intellectual property, domain names, bank balances, or any other assets, even if they have not traded.

The dormant bank account trap

One of the most common ways directors inadvertently break dormancy is through the company's bank account.

A bank account with money sitting in it does not by itself break dormancy — it is the transactions that matter. However, the following scenarios can be problematic:

• Bank interest credited to the account: Even a small amount of interest income is a "significant accounting transaction" for Companies House purposes and may mean the company is not dormant for HMRC purposes (investment income).
• Bank charges debited: Regular bank charges are transactions that may need to be recorded in the company's books.
• Residual balance from initial share capital: A £100 cash balance from paid-up share capital, untouched, is acceptable.

The accepted exception: A very small residual balance — such as the £1–£2 that some banks retain as a CHAPS mandate fee — is generally treated as falling within the "bank charges exception" and does not break dormancy. However, the rules are not entirely precise on this point, and if you are uncertain, close the account entirely and transfer any balance to the director as repayment of a director's loan.

Best practice: If you want absolute certainty of dormancy, close the company bank account and hold zero cash assets. The company can reopen a bank account if it ever returns to trading.

Maintaining dormancy: best practices

To ensure your company remains genuinely dormant and avoids any compliance complications:

No trading activity

• Do not issue any invoices or accept any payments on behalf of the company
• Do not enter into any contracts in the company's name
• Do not carry out any services or supply any goods through the company

No employees

• Do not employ anyone through the company — even a single employee creates PAYE obligations with HMRC
• Do not operate a payroll, even if no wages are paid

No dividends

• Do not pay dividends to shareholders — a dividend payment is a significant accounting transaction and may have tax implications

No new liabilities

• Do not take out any loans in the company's name
• Do not sign any agreements or leases

Keep filing obligations current

• Set calendar reminders for the confirmation statement deadline (and the 14-day window after)
• Diarise the accounts filing deadline (9 months after your accounting period end)
• Keep the registered office address up to date — Companies House correspondence goes there, and missing it means missing warning letters

Striking off vs staying dormant

If you are confident you will never use the company again, voluntary strike-off is almost always the better option. Maintaining a dormant company costs roughly £100–£250 per year in ongoing filing costs — over five years, that is up to £1,250 for a company you are not using.

Voluntary strike-off (DS01)

To dissolve a company voluntarily:

1. File form DS01 with Companies House — £8 fee if filed online, £10 on paper
2. Notify all relevant parties within 7 days: shareholders, directors, creditors, employees, anyone with a financial interest in the company
3. Companies House publishes a notice in the Gazette (the official public notice publication)
4. After 2 months, if no objections are received, the company is dissolved

Prerequisites:

• The company must not have traded or changed its name in the last 3 months
• No pending legal proceedings or insolvency processes

Warning: bona vacantia and pre-dissolution transactions

Before dissolving a company, you must remove all assets. Any assets remaining in the company at the point of dissolution pass to the Crown as bona vacantia (ownerless property).

Additionally, if you transfer assets out of the company at an undervalue shortly before dissolution — for example, transferring a company asset to yourself as a director for free or at a nominal price — HMRC may treat this as a distribution under section 1000 of the Corporation Tax Act 2010. This is taxed as income (dividend income) rather than as a capital gain, which is typically less favourable. The rules apply to transactions in the final 3 years before dissolution in some circumstances.

Always take advice before extracting assets from a company ahead of dissolution — particularly if the company holds property, intellectual property, or cash above the dividend allowance level.

When to keep the company dormant instead

Despite the cost, keeping the company dormant may be worthwhile if:

• You may want to return to trading under the same company and brand within the next 2–3 years
• The company holds a valuable company number (e.g., a company incorporated many years ago with a very low number) or a useful name
• You are in a dispute or legal proceeding that involves the company — you cannot dissolve it while any legal action is pending
• The company holds IP, domain names, or other assets that would be complicated to transfer out

Step-by-step annual checklist for a dormant company

Each year:

1. Note your confirmation date and set a reminder for 14 days before the filing deadline
2. Log in to Companies House WebFiling and review the company information for accuracy
3. File the confirmation statement and pay the £34 fee
4. After your accounting period ends, prepare dormant company accounts (AA02)
5. File accounts online before the 9-month deadline
6. Check whether HMRC has issued a CT603 — if so, file a CT600 with all zeros

If circumstances change:

• If you start trading, notify HMRC immediately (within 3 months of commencing business) and ensure you file CT600s going forward
• If you decide to dissolve, check the DS01 requirements and clear all company assets first

Frequently asked questions

If my company has never traded since incorporation, do I still need to file accounts?

Yes. The obligation to file accounts begins from incorporation, not from when you start trading. Your first set of dormant accounts will cover the period from incorporation to your first accounting reference date (typically set at the end of the month 12 months after incorporation, or you can change it). File these accounts within 21 months of incorporation.

Can I change my accounting reference date to give myself more time?

Yes, you can shorten or extend your accounting period by filing form AA01 with Companies House. You can extend to a maximum of 18 months, but only once every 5 years. Shortening can be done more freely. Note that extending the period also extends the filing deadline, which can be useful if accounts are not ready.

My company received a small HMRC tax refund — does that break dormancy?

A tax refund paid into the company bank account is a transaction that would need to be recorded in the company's books. It could technically be a significant accounting transaction. In practice, HMRC refunds relating to a period of trading before dormancy are often treated as part of the winding-down process rather than active trading. Consult an accountant on the specific circumstances — you may need to file accounts as a trading company for that period rather than using the dormant format.

Do I need a registered office address?

Yes — every company must have a registered office in the jurisdiction of incorporation (England and Wales, Scotland, or Northern Ireland). The registered office must be a physical address that can receive correspondence. If you use your home address and do not want it on the public record, registered office services typically cost £50–£150 per year and forward mail to you.

What is the difference between striking off and liquidation?

Strike-off (voluntary or compulsory) is a simple administrative process for companies that have no outstanding liabilities, no pending legal proceedings, and minimal assets. Liquidation (Members' Voluntary Liquidation or Creditors' Voluntary Liquidation) is a formal insolvency process involving a licensed insolvency practitioner — it is used where the company has significant assets to distribute, creditors to settle, or complex tax affairs. For a genuinely dormant company with no liabilities and minimal assets, voluntary strike-off via DS01 is the appropriate and far cheaper route.