What makes a company dormant?
For Companies House, a company is dormant during any period in which it has no significant accounting transaction. Section 1169 of the Companies Act 2006 defines that as any transaction the company must record in its accounting records.
A few payments don’t count. The Act disregards:
- payment for shares taken by the subscribers when the company was formed;
- fees paid to Companies House for a change of name, re-registration or the confirmation statement;
- a penalty for filing accounts late.
Everything else usually does. Receiving bank interest, paying a bank charge, paying a director’s expenses or invoicing a customer all mean the company is not dormant for that period. GOV.UK’s dormant companies page describes the exemption as “filing fees paid to Companies House”, which is broader than the Act’s specific list.
Is dormant for HMRC the same thing?
No. HMRC decides dormancy for Corporation Tax separately. According to its guide Corporation Tax: trading and non-trading, a company is usually dormant for tax if it:
- has stopped trading and has no other income, such as investments;
- is a new company that hasn’t started trading;
- is a club or association owing less than £100 in Corporation Tax;
- is a flat management company.
HMRC adds that “trading includes buying, selling, renting property, advertising, employing someone or getting interest”.
| Rule | Companies House | HMRC |
|---|---|---|
| Test | No significant accounting transactions | Not trading and no other income |
| Annual accounts | Always required | Not applicable |
| Confirmation statement | Always required | Not applicable |
| Company Tax Return | Not applicable | Only if HMRC sends a notice to deliver |
What does a dormant company still have to file?
Every dormant company files two things with Companies House each year:
- Annual accounts. Dormant accounts are a balance sheet with notes, a statement that the company was dormant throughout the period, and last year’s figures. They are due 9 months after the accounting reference date. The dormant company accounts page explains what goes in them.
- A confirmation statement. This confirms the company’s details are up to date, and carries its own Companies House fee.
Late accounts are penalised exactly as for a trading company, from £150 upwards. The late filing penalties guide has the full table.
Does a dormant company file a tax return?
Only if HMRC has asked for one. A company must file a Company Tax Return when it receives a notice to deliver a Company Tax Return. If a notice has been issued, the company files a return showing it was dormant for that period.
HMRC’s guidance warns: “If you have not informed HMRC you are dormant you will still be required to submit a Corporation Tax tax return. Failure to do so may result in penalties.” Since April 2026 the first late filing penalty is £200.
How do you tell HMRC a company is dormant?
GOV.UK says “you can tell HMRC that it’s dormant”, and HMRC may also write to say it will treat a company as dormant. The pages checked for this guide don’t name one current channel, so the usual approach is to use the company’s HMRC business tax account or the contact details on the latest HMRC letter, quoting the 10-digit company UTR.
That UTR is on the CT41G letter HMRC sent after incorporation. The guide to finding a company UTR explains how to request a copy if it’s lost. Once HMRC accepts the company is dormant, it stops expecting returns until it sends a new notice.
When does dormancy end?
The first significant transaction ends it. For HMRC, a company that becomes active must tell HMRC within 3 months of the start of its tax accounting period, using HMRC’s online registration service. Its next accounts will be trading accounts, usually micro-entity accounts for a small company.
Why the two tests catch people out
UK searches for “what is a dormant company” run at about 1,000 a month, with a further 480 for “tell hmrc company is dormant” (DataForSEO, November 2026). The gap between the two suggests many directors learn the Companies House rule first and only later discover that HMRC applies its own.
The most common trap is the bank account. A company that earns a few pounds of bank interest is not dormant on either test: HMRC lists getting interest as trading, and for Companies House the interest is a transaction the company has to record.
Sources
- Companies Act 2006, section 1169 (legislation.gov.uk), updated up to date to 6 November 2026. Checked 6 November 2026.
- Dormant companies and associations (GOV.UK), updated 23 October 2026. Checked 6 November 2026.
- Corporation Tax: trading and non-trading (GOV.UK), updated 17 February 2020. Checked 6 November 2026.
- COM1040 Accounting periods: dormancy (HMRC manual), updated 17 December 2024. Checked 6 November 2026.
Search figures are 12-month UK averages from DataForSEO (Google Ads data), pulled 6 November 2026. Spotted something out of date? Tell us and it will be corrected.