Dormant companies and associations

2. 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 never had a ‘notice to deliver a Company Tax Return’

You can tell HMRC your company’s dormant over the phone or by post.

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.

HMRC won’t send you another ‘notice to deliver a Company Tax Return’ once they make your company dormant.

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.

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

You must deregister for VAT within 30 days of your company becoming dormant.

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

If you employ people

If you don’t plan to restart trading in this tax year, you should close your PAYE scheme.