File Dormant Company Accounts With Companies House

A significant accounting transaction is any expense or income that indicates meaningful business activity. Examples include paying directors or purchasing assets to generate profits. However, fees related to maintaining your dormant status, such as Companies House filing fees or professional fees for such filings, are not considered significant accounting transactions.

Making your company dormant requires careful planning and time. To submit dormant statements and stop filing tax returns, your company must have been in the following state for at least one financial year:

1. Cease operations: Ensure that your company ceases all operations. There should be no income or significant expenses during the financial period. Once this is achieved, you can file the dormant accounts.
2. Settle debts: Check and settle all outstanding transactions, including bills and invoices, to ensure the company remains debt-free.
3. No significant accounting transactions: Ensure there are no significant accounting transactions. This includes avoiding any income generation or significant expenses. Routine filing fees are typically excluded.
4. Inform HMRC: Notify HM Revenue and Customs that your company is now dormant for corporation tax purposes. This will stop them from expecting corporation tax returns from your company.
5. File final trading accounts: If required, submit your final trading accounts to HMRC, covering the period up to the cessation of trading. This includes submitting a final Corporation Tax return (CT600) and settling outstanding tax liabilities.
6. Annual accounts and confirmation statement: Although your company is dormant, you must still file annual accounts and a confirmation statement to Companies House to maintain its dormant status.

Dormant limited companies must file annual accounts and Companies House confirmation statements. To qualify for dormancy, your company must have either never started trading, or you must ensure that all operations have ceased and there have been no significant accounting transactions. Once your business is dormant, you must not pay corporation tax or file another company tax return with the tax authority.

Because your company is not actively trading, Companies House only requires a snapshot of your status. So you need to provide information about your previous year as follows —

• Basic company details as availed in your ertificate of incorporation.
• Your accounting reference date which is the anniversary of the last day of the month your company was incorporated. For instance, if you incorporated your company on 22 September 2023, your ARD will be 30 September 2024.
• Information about the issued share capital of your company.
• The total value of the called-up shares and cash held in hand or bank accounts.
• The date on which the accounts were approved by the director(s)
• An audit exemption statement as applicable

Remember, the company director must file annual accounts and send Companies House confirmation statements every year, even if they no longer intend to continue any kind of business activity or receive any income.

We can prepare and file accounts within two working days for never traded companies. Previously traded but now dormant companies may take longer, so we advise contacting us 5-7 working days before the due date.

We charge £88 for our comprehensive service, which includes preparing and filing the necessary documents with Companies House to ensure your dormant business complies with all legal requirements. This fee covers our expertise and the administrative work in accurately managing your dormant accounts.

Failure to file dormant accounts on time can result in significant late filing penalties from Companies House, including fines of up to £5,000. Additionally, your company may be struck off the register. Beyond the financial penalties, the directors' reputations may also be adversely affected, potentially leading to further legal consequences and difficulties in future business endeavours.

Instead of filing late, directors responsible for running the company and making sure all legal requirements are fulfilled can choose to close their company using the new Companies House online service and restore it in the future as needed.

A dormant venture can still hold assets, but these assets must not generate significant accounting transactions, meaning there should be no present income. For instance, if you own intellectual property that earns royalties, it would violate the dormant status. However, an inactive company can hold land for future prospecting purposes or other assets that do not produce income or incur expenses that would disqualify the company from being considered dormant.

Yes, and the company does not need to tell Companies House it is active; however, it must inform HMRC within 3 months. If the company has never traded, it may not have a Company UTR number and must register for Corporation Tax. Additionally, the venture must pay and submit corporation tax and company tax returns, respectively. The next set of non-dormant accounts you file will show the Registrar that your company is no longer dormant.

A dormant company has no significant accounting transactions, while a non-trading company may still have some financial activities but is not engaged in active business operations. Both types of companies must file a confirmation statement and annual accounts with Companies House. A dormant company does not need to submit tax returns if they’ve told HMRC their company is dormant unless it gets notice to deliver a Company Tax Return. However, a non-trading company must file tax returns at least once every five years.