A dormant company in the UK is one that isn't trading and has no other income, such as investments. As of October 2026, being dormant means two separate things: for HMRC it can stop you paying Corporation Tax and filing tax returns, but Companies House still needs annual accounts and a confirmation statement every year, though a small dormant company can file simpler dormant accounts.
That split is the whole story. Dormant doesn't mean quiet everywhere. HMRC and Companies House each have their own test, and you have to satisfy both.
Dormant for HMRC vs dormant for Companies House
| HMRC (Corporation Tax) | Companies House | |
|---|---|---|
| The test | Stopped trading and no other income, or a new company that hasn't started trading | No significant transactions in the financial year |
| What you still file | Nothing more once HMRC has accepted it, unless you get a notice to deliver a return | Annual accounts and a confirmation statement, every year |
| The benefit | No Corporation Tax and no Company Tax Returns | Small dormant companies can file dormant accounts with no auditor's report |
| Restarting | You must tell HMRC | No need to tell Companies House: your next non-dormant accounts show it |
When HMRC treats a company as dormant
GOV.UK says a company is usually dormant for Corporation Tax if it:
- has stopped trading and has no other income, for example investments
- is a new limited company that hasn't started trading
- is an unincorporated association or club owing less than £100 Corporation Tax
- is a flat management company
Watch the definition of trading. It includes buying, selling, renting property, advertising, employing someone or getting interest. A company that's stopped selling but still pays someone or earns bank interest isn't dormant for HMRC.
How to make a company dormant for Corporation Tax
- Check it meets the test above, and note the date trading stopped.
- Get the company's name and its 10-digit Unique Taxpayer Reference (UTR).
- Tell HMRC through its online dormant company service. Agents can use it with an agent code, and you can also tell HMRC by phone or post.
- If you've already filed a Company Tax Return or received a notice to deliver one, file that return online showing the company is dormant for the period.
- Registered for VAT and not planning to trade again? Deregister within 30 days of becoming dormant. Planning to restart? Keep sending nil VAT returns.
- If you employ people and won't restart trading this tax year, close the PAYE scheme.
Sometimes it works the other way round: HMRC may write to say it's decided to treat your company as dormant and that you don't have to pay Corporation Tax or file returns.
Dormant accounts at Companies House
A company is dormant for Companies House if it had no significant transactions in the financial year. Three things don't count as significant: filing fees paid to Companies House, penalties for late filing of accounts, and funds paid for shares when the company was incorporated. If it's dormant on that test and also qualifies as small, you can file dormant accounts instead of full ones and skip the auditor's report. You still file the confirmation statement. The paper form AA02 is for dormant companies limited by shares that have never traded, or whose only transaction is issuing subscriber shares, but Companies House says filing online is quicker.
Common reasons to keep a company dormant
- You've registered a company name for a future project and haven't started trading yet.
- You've stopped trading for now but want to keep the company, its name and its filing history ready to restart.
- The company exists only to hold a flat or building's management, which GOV.UK lists as usually dormant for Corporation Tax.
Whatever the reason, remember that dormant for HMRC doesn't mean dormant for Companies House. A company that paid its own late filing penalty is still dormant on the Companies House test, because penalties don't count as significant transactions, but one that paid a supplier should check carefully, because only filing fees, late filing penalties and payments for shares at incorporation are excluded.
If you'd rather close it, our guide to striking off a company covers the process.
Restarting a dormant company
When the company starts trading again, register for Corporation Tax again through your business tax account so HMRC knows. Your Companies House reporting dates don't change, because you kept filing accounts while dormant, but your Corporation Tax accounting period starts on the day trading restarts. Then the normal deadlines apply:
- Accounts to Companies House within 9 months of the year end.
- Corporation Tax paid within 9 months and 1 day of the year end.
- Company Tax Return, with full statutory accounts, to HMRC within 12 months of the year end.
GOV.UK's example: a dormant company with a 30 September accounting reference date restarts on 1 May. It prepares accounts for 1 October to 30 September as usual, but its first Company Tax Return covers only 1 May to 30 September. If you're weighing whether to keep the company at all, our guide to registering a company in the UK shows what starting again from scratch involves.
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The verdict
Making a company dormant is a sensible way to park it, not a way to forget it. Tell HMRC, deal with VAT and PAYE the same month, and put the Companies House accounts and confirmation statement dates in your diary, because those keep coming whether you trade or not. And if the business account is still earning interest, it isn't dormant for HMRC.
Related: investment: guidelines and how to pitch.
Frequently asked questions
What makes a company dormant in the UK?
For Corporation Tax, it has stopped trading and has no other income, or it's a new company that hasn't started trading. For Companies House, it had no significant transactions in the financial year.
Does a dormant company need to file accounts?
Yes. Companies House still needs annual accounts and a confirmation statement. A company that's dormant for Companies House and qualifies as small can file dormant accounts without an auditor's report.
Does a dormant company pay Corporation Tax?
No. Once you've told HMRC the company is dormant, it doesn't pay Corporation Tax or file Company Tax Returns unless HMRC sends a notice to deliver one or it starts trading again.
Does bank interest stop a company being dormant?
Yes for HMRC. Trading includes getting interest, so a company earning interest isn't dormant for Corporation Tax.
Do I tell Companies House when a dormant company restarts?
No. You tell HMRC by registering for Corporation Tax again, and your next non-dormant accounts show Companies House that the company is no longer dormant.
