Dormant company
A dormant company is one with no significant accounting transactions in a financial period. It still files dormant accounts and a confirmation statement at Companies House, but may be treated as dormant for corporation tax too.
How it works
Companies House and HMRC use different tests. For Companies House, dormancy means no significant accounting transactions during the period — filing fees and shares taken by subscribers are ignored, but a bank charge or a single sale is not. Dormant accounts are very short: a balance sheet with statutory notes, no profit and loss account.
For HMRC, the company is dormant for corporation tax if it is not carrying on business activity. Tell HMRC and it will normally stop issuing notices to deliver a return. Until it does, any notice received still has to be answered, even with nil figures.
A confirmation statement remains due every year, and the identity verification requirements apply to directors of dormant companies exactly as they do to trading ones. Reserving a name, pausing a business or holding a property title through a shell all still carry those obligations.
Going dormant deliberately is a sensible alternative to closing a company you may use again, but keep the bank account quiet: interest received, or a direct debit going out, ends dormancy and pulls the company back into full accounts and a corporation tax return.
Who this affects
- Directors pausing a business rather than closing it
- Companies formed to protect a name and not yet trading
- Holding companies with no transactions of their own
- Anyone still receiving bank interest on a supposedly dormant account
Common mistakes
- Letting a bank charge or interest go through and losing dormant status
- Filing dormant accounts but forgetting the confirmation statement
- Assuming HMRC knows the company is dormant without being told
- Treating dormancy as an alternative to dealing with unpaid liabilities
Frequently asked questions
What makes a company dormant?
No significant accounting transactions in the financial period. Companies House ignores filing fees and subscriber shares, but most other transactions end dormancy.
Does a dormant company file accounts?
Yes, simplified dormant accounts at Companies House, plus an annual confirmation statement.
Do I need to file a corporation tax return?
Only if HMRC has issued a notice to deliver one. Tell HMRC the company is dormant and it will usually stop issuing notices.
Should I make my company dormant or close it?
Dormancy suits a genuine pause where you expect to trade again. If the company will not be used, closing it removes the ongoing filing obligations.
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Reviewed by Waqas Sagar ACA FCCA FMAAT · Last reviewed 13 September 2026 · Figures for 2026/27 · About our practice
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