Dormant companies and associations

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Dormant for Corporation Tax

Your company is usually dormant for Corporation Tax if it:

Trading includes buying, selling, renting property, advertising, employing someone or getting interest. HMRC has detailed guidance on what counts as dormant for Corporation Tax.

When HMRC thinks your company is dormant

You may get a letter from HMRC telling you:

  • they’ve decided to treat your company or association as dormant
  • that you don’t have to pay Corporation Tax or file Company Tax Returns

When you think your company is dormant

If your company has stopped trading and has no other income, you can tell HMRC that it’s dormant for Corporation Tax.

If you’ve filed a Company Tax Return or had a ‘notice to deliver a Company Tax Return’

You’ll still need to file a Company Tax Return online - this will show HMRC that your company is dormant for this period.

Limited companies

You don’t need to pay Corporation Tax or file another Company Tax Return once you’ve told HMRC your company is dormant unless you receive a further notice to deliver a Company Tax Return.

You must still file annual accounts and a confirmation statement (previously annual return) - exactly what you must do depends on if you’re dormant for Companies House.

If you’re registered for VAT

If you do not intend to trade again you must deregister for VAT within 30 days of your company becoming dormant.

However, if you plan to restart trading, you must send ‘nil’ (empty) VAT returns while your company is dormant.

If you employ people

If you do not plan to restart trading in this tax year, you should close your PAYE scheme.