Setting up a dormant company can be a strategic move for protecting a business name or planning a future venture. But even if your company is not trading, you still have legal obligations—including notifying HMRC.
Here’s a simple guide to registering a dormant company with HMRC and staying compliant in 2025.
1. What Is a Dormant Company?
A company is considered dormant by HMRC if it:
- Has no significant accounting transactions during the financial year
- Is not actively trading or receiving income
Companies House also considers a company dormant if it’s not engaged in any business activity.
2. Why Register a Dormant Company?
Common reasons include:
- Securing a company name for future use
- Holding assets or intellectual property
- Pausing a business operation temporarily
3. Steps to Register a Dormant Company
If your company is newly formed:
- Incorporate the company via Companies House (online or by post)
- Once set up, inform HMRC that the company is dormant
If your active company becomes dormant:
- Notify HMRC in writing or online via your HMRC business account
- Ensure no Corporation Tax returns are due or file a ‘nil’ return if requested
4. Filing Obligations for Dormant Companies
Even if dormant, you must:
- File annual confirmation statements with Companies House
- Submit dormant company accounts (simplified format)
No Corporation Tax is due, but you may need to submit a return if HMRC requests it.
5. When Does a Dormant Company Become Active?
If your company:
- Starts trading
- Receives income (including bank interest)
- Buys or sells assets
…it must notify HMRC that it is now active and comply with Corporation Tax rules.
6. How to Tell HMRC Your Company Is Dormant
You can:
- Write to your local Corporation Tax office
- Use your HMRC online account to update company status
If you receive a notice to deliver a tax return, respond even if the company is dormant.
Common Pitfalls to Avoid
- Failing to notify HMRC, which may lead to tax return penalties
- Missing filing deadlines at Companies House
- Assuming no action is needed because the company is inactive
How Eclat Accountancy Can Help
We support businesses by:
- Handling Companies House and HMRC notifications
- Preparing and filing dormant company accounts
- Advising on the timing and implications of reactivating your company
Final Thoughts
Registering a dormant company with HMRC is simple—but skipping key steps can lead to compliance issues. Whether you’re pausing business activity or planning for the future, staying on top of your responsibilities protects your company and reputation.
Speak to Eclat Accountancy today for help managing your dormant company status properly.
