What Counts as a Dormant Company for Companies House in 2026?

A dormant company has no significant accounting transactions during a financial year, excluding permitted transactions such as bank interest, director/shareholder loans, or filing fees. It remains registered and must file dormant accounts and a confirmation statement with Companies House.

What counts as a dormant company for Companies House?

A dormant company has no significant accounting transactions during the financial year, aside from permitted transactions like bank interest, director/shareholder loans, or Companies House fees.

Companies House and UK accounting rules treat the company as inactive when it records only those limited transactions.

Companies House defines dormancy by reference to accounting transactions. Significant transactions include sales revenue, purchase of goods for resale, wages, and rent. Permitted transactions do not break dormancy. Common permitted items include bank interest, payments for shares by subscribers, and fees paid to Companies House. Director loan movements and payments between shareholders are allowed if recorded correctly.

How does Companies House test dormancy?

Companies House assesses dormancy from the company’s statutory accounts and transaction records for the financial year; accounts showing only permitted transactions pass the dormancy test.

Companies House reviews the filed accounts and expects the balance sheet and notes to reflect no trading activity. Auditors or accountants verify that income, expenses, and cash flows relate only to permitted items. If the company records sales, purchases, or wages, Companies House considers it active.

Companies also declare dormancy status to HMRC when relevant. HMRC may check VAT registration and PAYE activity to confirm non-trading. If the company registers for VAT or operates PAYE, HMRC typically treats it as trading. Directors must ensure bookkeeping shows transaction types and amounts clearly to avoid misclassification.

Read our articles, Why Entrepreneurs Register Companies Before They Start Trading and Dormant Company Accounts Filing Service: Stay Compliant with Companies House.

Which transactions are permitted without breaking dormancy?

Permitted transactions include bank interest, transfers of money between directors and the company, share subscription receipts, and payment of fees to Companies House and auditors.

Bank interest received and bank charges are commonly permitted entries. Directors may advance funds and repay them; these entries must post to loan accounts. Receipts for the allotment of shares by subscribers do not count as trading. Payment of penalties, account filing fees, and registered office charges is acceptable. All permitted transactions must be immaterial to the company's trading activities and properly documented.

Examples:

• Receive £12 bank interest and pay a £6 bank charge.

• The director lends £2,000 to the company and later receives repayment.

• Pay £13 for an annual confirmation statement to Companies House.
  Each example remains within dormancy rules when recorded correctly.

How do dormant company accounts differ from active company accounts?

Dormant company accounts are simplified: a balance sheet and minimal notes that exclude a profit and loss account, because there is no trading income or expenditure.

Dormant accounts show opening and closing balances for assets and liabilities. Companies House accepts micro-entity or dormant company accounts prepared under FRS 102 section 1A when conditions apply. The accounts must include a director’s statement confirming dormancy for the period. No detailed turnover, cost of sales, or employee expenses appear.

Preparers commonly use the dormant company accounts template. The template documents retained earnings, share capital, and any director loan balance. If the company holds assets such as investments, the accounts must reflect them. If the company incurs disallowed transactions, the preparer must revert to full accounts.

When must a dormant company still file documents?

A dormant company must file annual dormant accounts and a confirmation statement with Companies House each year and notify HMRC that it is dormant for Corporation Tax if required.

Companies House requires an annual confirmation statement and statutory accounts within nine months of the company’s financial year end for private companies. Dormant accounts often follow micro-entity timelines. If the company has never been active since its incorporation, the first set of accounts may be a short or full period, depending on the accounting reference date.

HMRC requires notification of dormancy to avoid Corporation Tax penalties. If the company previously traded, directors must send a ‘final’ Corporation Tax return or a dormancy notification. If the company becomes active, filings must change to reflect trading status. Failure to file dormant accounts generates late filing penalties and possible strike-off action.

What are the tax implications for a dormant company?

A dormant company has no Corporation Tax liabilities while genuinely non-trading, but it must still inform HMRC and maintain records to support dormancy.

HMRC expects companies to notify them when trading stops. If a dormant company has income such as bank interest, the amount generally remains below tax thresholds, but directors must report it if required. Dormant status does not automatically cancel VAT or PAYE registrations; companies must deregister if they no longer meet thresholds and have no taxable supplies or employees.

If HMRC finds evidence of trading, it may open an enquiry and assess tax due. Keeping clear, dated records of permitted transactions helps handle any HMRC check. Directors remain responsible for accurate declarations and timely notifications.

How does a company move between dormant and active status?

A company becomes active when it records significant accounting transactions like sales, purchases, or wages; it becomes dormant when such transactions cease and only permitted transactions occur.

When starting trading, directors must update bookkeeping, register for VAT if turnover meets thresholds, and inform HMRC. Filing obligations change to include full statutory accounts and tax returns for trading periods. When trading stops, directors notify HMRC, file outstanding returns, and prepare dormant accounts for Companies House.

Practical steps: update accounting ledgers, close any PAYE schemes if no employees remain, and deregister for VAT when supply stops, and turnover falls below the deregistration threshold. Directors should keep records showing the date trading ceased or resumed.

Who benefits from registering a dormant company?

Entrepreneurs register dormant companies to protect a trading name, hold assets, or prepare for future trading while keeping compliance obligations minimal.

Startups often register companies before trading to secure a brand and limit personal liability. Holding intellectual property or property titles in a dormant company separates risk. Universities and spinouts use dormancy to hold IP until commercialisation. Dormant status reduces reporting complexity while retaining a corporate vehicle for future use.

Companies that plan to start trading within 12 months commonly remain dormant to reduce early administrative burden. However, they still meet filing deadlines and keep records to demonstrate that no trading has occurred.

Explore our File Accounts for Dormant Companies guides,

Dormant Company Rules Every Director Should Know 

File Accounts for Dormant Companies Process in UK: 5 Steps, Requirements and Expected Timelines 

How does My Company Registration help with dormant company filings?

My Company Registration provides a File Accounts for Dormant Companies service that prepares and files dormant accounts, ensures Companies House compliance, and advises on HMRC notifications.

The service verifies permitted transactions, prepares a dormant accounts set, completes the director’s confirmation statement, and files documents electronically. It also advises on Corporation Tax dormancy notifications and deregistration of VAT or PAYE if required. This reduces late-filing risk and ensures accurate classification.

My Company Registration streamlines the process for directors who want compliance without full accounting complexity. The team validates transaction types and prepares documents that align with Companies House expectations.

Dormant status depends on the absence of significant accounting transactions during a financial year, with specific permitted exceptions. Directors must maintain clear records, file dormant accounts and a confirmation statement with Companies House, and notify HMRC to avoid tax or filing penalties. My Company Registration’s File Accounts for Dormant Companies service prepares compliant dormant accounts and handles electronic filing to keep a dormant company in good standing.

Frequently Asked Questions

What counts as a dormant company for Companies House?

A dormant company has no significant accounting transactions during the financial year, except for permitted transactions like bank interest, director loans, or Companies House fees. My Company Registration helps directors confirm dormancy and file accurate dormant accounts that meet Companies House requirements.

Do dormant companies need to file accounts with Companies House?

Yes, dormant companies must file annual dormant accounts and a confirmation statement with Companies House each year. The File Accounts for Dormant Companies service prepares and submits compliant dormant accounts to avoid late-filing penalties.

How do I tell HMRC that my company is dormant?

You must notify HMRC that your company is dormant for Corporation Tax by submitting a final return or a dormancy notification after trading stops. My Company Registration advises on the correct HMRC steps and ensures your filings support your dormant status.

What transactions break dormant company status?

Sales revenue, purchases of goods for resale, wages, and rent are significant transactions that break dormancy. Permitted items like bank interest, share subscriptions, and filing fees do not break dormancy when recorded correctly in your accounts.

Can I keep a company dormant while waiting to start trading?

Yes, entrepreneurs often keep companies dormant to protect a trading name, hold assets, or prepare for future trading while maintaining minimal compliance. My Company Registration’s File Accounts for Dormant Companies service ensures your dormant filings stay compliant while you plan your launch.