If you run a limited company and you have not traded or you have stopped trading, if may well be an advantage to become a dormant company. In this article we discuss what is a limited company and the annual filling requirements for a dormant limited company.
What is a Dormant Company
A dormant company is a company that is:
- A new company that hasn't started trading yet.
- A company that has previously traded but has stopped trading. However, you intend to start trading again sometime in the future.
- An unincorporated association or club that has less than £100 corporation tax to pay
- A flat management company (subject to certain rules).
Who decides if the Company is dormant?
HMRC may deicide that your company is dormant, if they do they will write to you to inform you of their decision.
You can decide that the company is dormant and you can inform HMRC of this fact either by phone or online at HMRC's website.
You will need the Companies Name and UTR number.
However, if HMRC send you a "notice to deliver a Company Tax Return" before you have told them, you must send in a CT600 and tell them that you are dormant through this.
To inform HMRC that you are a dormant company create a HMRC CT600 filing in EasyDigitalFiling software.
Most of the field in the CT600 will be blank, however, on the declaration page, in the reason box select "company dormant".
Then just sign and date your return.
Companies House Requirements
Even if you are a dormant company, you still must file a confirmation statement each year with Companies House.
You must also file a set of dormant accounts, whilst you are dormant. For Companies House you are considered dormant if you have had no significant transactions during your financial period.
To file dormant accounts through EasyDigitalFiling Corporation Tax and Accounts software, create your Companies House filing submission and a set of micro accounts. Open up the set of accounts and on the Company information page set create full statutory accounts to "No" and set create dormant company accounts to "Yes".
Once you have filled in your balance sheet and signed your declaration, dormant company accounts will be submitted to Companies House.
Restarting a dormant company
Once you want to start or re-start trading, you will need to notify HMRC by registering for corporation tax again.
You do not need to inform Companies House that you have started trading again, however, when you are due to file your next set of company accounts you will file as a non-dormant company.