Dormant company accounts

What's included

• Review of bank statements and transactions for the year
• Check against the Companies House definition of dormant
• Check against HMRC's definition of dormant for Corporation Tax
• Preparation of dormant accounts (AA02 or equivalent)
• Filing with Companies House
• Help telling HMRC the company is dormant
• Advice if the company does not qualify as dormant
• Reminder of next year's accounts and confirmation statement deadlines

Who needs this service

Many companies are dormant for a while: a company formed to protect a name, one set up before the business launches, or one that has stopped trading but the owners want to keep. Being dormant does not remove the duty to file. Every dormant company must still file annual accounts and a confirmation statement with Companies House each year.

What "dormant" means — Companies House and HMRC differ

For Companies House, a company is dormant if it has had no "significant" accounting transactions during the financial year. Some transactions are ignored, such as:

• paying Companies House fees
• paying late filing penalties to Companies House
• shareholders paying for the shares they took when the company was formed

Almost anything else counts as significant — for example, bank charges, bank interest, rent, payments to directors, a website subscription or buying equipment.

For HMRC (Corporation Tax), a company is usually dormant if it is not trading and has no other income, such as investment income. A newly formed company that has not started trading is normally dormant for HMRC. HMRC may treat a company as dormant even when Companies House would not — for example, if it paid a small bank charge but earned no income.

Because the rules differ, a company can be dormant for HMRC but still need to file non-dormant (usually micro-entity) accounts with Companies House. We check both.

Which accounts we file

• Dormant accounts: for a company that had no significant transactions and qualifies as small. These are short accounts with a balance sheet and notes, filed online or on form AA02. No audit is needed.
• Micro-entity accounts: if the company had some small transactions, it cannot file dormant accounts and we prepare micro-entity accounts instead. We will tell you before doing so and confirm any change in price.

Deadlines

• First accounts: due 21 months after the date the company was incorporated.
• Later accounts: due 9 months after the end of the company's financial year.

Late accounts bring an automatic Companies House penalty, starting at £150 for a private company and rising to £1,500 if more than 6 months late. The penalty doubles if accounts are late two years in a row. Persistent failure to file can lead to the company being struck off.

Telling HMRC

If the company has stopped trading or never started, tell HMRC it is dormant for Corporation Tax. You then generally do not need to file Company Tax Returns — unless HMRC sends a "notice to deliver" a return, in which case one must still be filed. If HMRC has already sent a notice, we can arrange the return as part of our annual accounts service.

How it works

1. Order online and send us the company's bank statements for the year (or confirm it has no bank account).
2. We check whether the company is dormant for Companies House and HMRC.
3. We prepare the accounts and send them to you to approve.
4. We file them with Companies House and send you confirmation.

Common mistakes

• Filing dormant accounts when the company paid bank charges or a director
• Forgetting that a dormant company still files a confirmation statement
• Ignoring a notice to deliver a tax return from HMRC
• Missing the first accounts deadline, which catches many new companies

If you no longer need the company at all, voluntary strike-off may be cheaper than filing every year.

Frequently asked questions

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