What is a Dormant company?
A company may be ‘dormant’ if it’s not doing business (‘trading’) and doesn’t have any other income, like investments.
If your company happens to have similar characteristics then you will first need to follow the following steps for it to be considered officially “Dormant”:
1-You will first need to STOP trading if you want your company to go from active to dormant, meaning that you need to not do any business like receiving earnings from it.
2- You will need to contact HMRC to notify them of the status of your company becoming dormant. The easiest way to contact them is through their Live-Chat for a faster response.
3-It is necessary that you need to cancel your VAT registration within 30 days of your organisation becoming officially Dormant if you happen to be registered for VAT.
My company is dormant – do I still have to pay tax and file a tax return? Or are there any filing requirements?
If your company is currently not active, trading or carrying out any kind of business activity, it is considered dormant for corporation tax purposes. In this instance, your company is not liable for corporation tax and you do not have to file a company tax return.
BUT a dormant company can still be liable for corporation tax if it was previously trading and HMRC issues a ‘Notice to deliver a Company Tax Return’. In such cases, the company will have to file a tax return for the period of activity during its most recent accounting period. Dormant companies are also still required to file confirmation statements for Companies House every year.
We currently have a Dormant Company Accounts service where one of our accountants will prepare and file the accounts for you. The service is available to new and existing customers, regardless of whether you incorporated your company using our website, you can reach our Launchese accounting department at firstname.lastname@example.org for more infos.
What happens if I want my company to become active again?
A limited company that is dormant should inform HMRC when it does become active. You have 3 months from the start of the tax accounting period to let HMRC know it is active, and this can be easily done using HMRC’s online registration service or by providing the relevant information in writing.
Disclaimer: This blog post is considered just a summary, we strongly recommend seeking professional advice like an accountant first always.