Dormant Company in 2026: What It Means, What You Still File and How to Restart

A dormant company is a limited company that exists on the register but isn't doing business. People keep one to protect a name, to park a business between projects, or because they set up a company and haven't started trading yet. "Dormant" sounds like "nothing to do", but that isn't how it works. This guide explains the two separate meanings of dormant (one for Companies House, one for HMRC), what a dormant company still has to file in 2026, how to tell HMRC, when you can use the short AA02 form, what it costs, and how to restart. A dated worked example shows a company going dormant and coming back to life.

Quick answer

A company is dormant for Companies House if it had no significant accounting transactions in its financial year, and dormant for Corporation Tax if it isn't trading and has no other income. A dormant company still files annual accounts (simple dormant accounts if it's small) and a confirmation statement every year. Tell HMRC online so it stops expecting Company Tax Returns.

• Confirmation statement still due every year: £50 online

• Dormant accounts have the same deadline and late penalties as any accounts: £150 to £1,500

• Bank charges or interest break dormancy for Companies House

• Directors must still verify their identity with Companies House

• From 1 April 2028, dormant accounts must be filed through software

What "dormant" means: two different tests

The word dormant has a different meaning at each of the two bodies you deal with, and a company can be dormant for one and not the other. Most of the confusion around dormant companies comes from mixing them up.

For Companies House, the test is about the company's accounting records. Companies House guidance says a company is dormant if it has had no "significant accounting transactions" during the accounting period. A significant accounting transaction is anything the company should enter in its accounting records. A short list of items is ignored: paying for the subscriber shares when the company was formed, Companies House fees for a change of name, re-registration or the confirmation statement, and civil penalties for filing accounts late. Everything else counts, including bank charges.

For HMRC, the test is about trading and income. GOV.UK says a company is usually dormant for Corporation Tax if it has stopped trading and has no other income, such as from investments; if it's a new company that hasn't started trading; if it's a flat management company; or if it's a club or association that owes less than £100 in Corporation Tax. HMRC counts buying, selling, renting property, advertising, employing someone and earning interest as trading or income.

Companies House dormancy vs HMRC dormancy

	Companies House	HMRC (Corporation Tax)
The test	No significant accounting transactions in the financial year	Not trading and no other income
Ignored items	Subscriber shares, filing fees, late filing penalties	—
Bank interest of £2	Breaks dormancy (it's a transaction)	Breaks dormancy (it's income)
Bank charges paid by the company	Breaks dormancy	Doesn't on its own create taxable income
What you file	Accounts and confirmation statement every year	No Company Tax Return unless HMRC sends a notice to deliver
How it's recorded	Dormant accounts show you were dormant	You tell HMRC online, by phone or by post

The test

Companies House

No significant accounting transactions in the financial year

HMRC (Corporation Tax)

Not trading and no other income

Ignored items

Companies House

Subscriber shares, filing fees, late filing penalties

HMRC (Corporation Tax)

—

Bank interest of £2

Companies House

Breaks dormancy (it's a transaction)

HMRC (Corporation Tax)

Breaks dormancy (it's income)

Bank charges paid by the company

Companies House

Breaks dormancy

HMRC (Corporation Tax)

Doesn't on its own create taxable income

What you file

Companies House

Accounts and confirmation statement every year

HMRC (Corporation Tax)

No Company Tax Return unless HMRC sends a notice to deliver

How it's recorded

Companies House

Dormant accounts show you were dormant

HMRC (Corporation Tax)

You tell HMRC online, by phone or by post

A typical example of the mismatch: a company that stopped trading but still pays a monthly bank fee. HMRC may happily treat it as dormant, because there's no trade and no income. But each bank fee is a transaction the company must record, so for Companies House it isn't dormant, and it has to file ordinary small company or micro-entity accounts rather than dormant accounts. The filing isn't much harder, but the dormant-accounts shortcut is gone.

Why people keep a dormant company

There are good reasons to keep a company on the register without using it. The most common are protecting a company name you plan to trade under later, holding a company ready for a project that hasn't started, pausing a business during a career break or a period of employment, and keeping a company alive while you wait for a final payment or the end of a contract dispute. Some groups also keep dormant subsidiaries to hold a brand name or an old trading name.

The alternative is to close the company. Our guide to closing a limited company covers voluntary strike-off for £13 online and the liquidation routes. If you won't need the company again, closing is usually cheaper over a few years than keeping it dormant, because every year of dormancy brings a confirmation statement fee, a set of accounts and the risk of a penalty if someone forgets.

Telling HMRC your company is dormant

When a new company is incorporated, HMRC sets up a Corporation Tax record and posts a letter (form CT41G) with the company's Unique Taxpayer Reference to the registered office. If the company isn't going to trade straight away, or if a trading company stops, tell HMRC it's dormant. That stops HMRC from expecting returns and sending penalties for returns you didn't think you needed to file.

Use the GOV.UK service Tell HMRC your company is dormant for Corporation Tax. You'll need the company's name, its 10-digit UTR and, if it traded before, the date it stopped. Agents can use the service with an agent code. If you can't use the online service, contact HMRC's Corporation Tax enquiries line or write to them.

Two points catch people out. First, if HMRC has already sent the company a notice to deliver a Company Tax Return for a period, telling HMRC the company is dormant doesn't cancel that notice. You must still file the return online, and it will show HMRC that the company was dormant for the period. Second, once HMRC accepts the company as dormant, you don't need to file again unless you receive a further notice to deliver a return. HMRC can send one at any time, sometimes years later, so check post to the registered office.

Dormancy for Corporation Tax also has knock-on effects elsewhere:

• VAT. If the company won't trade again, GOV.UK says you must deregister for VAT within 30 days of the company becoming dormant. If you do plan to restart, you can stay registered but must send nil VAT returns while dormant.
• PAYE. If you won't restart trading in the current tax year, close the PAYE scheme. Otherwise HMRC will keep expecting payroll submissions.
• Holding only assets. HMRC's internal manual says a company that only holds chargeable assets, such as property, can be treated as dormant if those assets aren't likely to produce profits, income or gains soon. A company that lets out a property is trading in HMRC's sense and isn't dormant.

Going dormant with HMRC

Step 1

CT41G letter gives the UTR

Step 2

Tell HMRC the company is dormant

Step 3

File any return already requested

Step 4

No more returns

unless HMRC sends a new notice

Step 5

Restart

register within 3 months after starting to do business

What a dormant company still files at Companies House

Telling HMRC doesn't tell Companies House anything. The two bodies run separate systems, and GOV.UK is clear that a dormant company must still file a confirmation statement and annual accounts with Companies House every year.

The confirmation statement

Every company, including dormant and non-trading companies, must file a confirmation statement at least once every 12 months. The fee is £50 online or £110 on paper form CS01, paid once in each 12-month payment period. You have 14 days after the end of the review period to file it. The statement confirms that the registered office, registered email address, directors, people with significant control, shareholders and share capital are correct, and that the company's intended future activities are lawful.

Identity verification applies to dormant companies exactly as it does to trading ones. Since 18 November 2025, Companies House won't accept a confirmation statement until every director has verified their identity and the company gives each director's personal code. A dormant company with a director who never verifies can't file its statement, and that can lead to a fine of up to £5,000, financial penalties and strike-off. Our confirmation statement guide covers the filing step by step.

Dormant accounts

A company that has been dormant and qualifies as small can file dormant accounts instead of full accounts. Companies House guidance says dormant accounts don't need a profit and loss account or a directors' report. They're a balance sheet with notes, and the balance sheet must state that the company was dormant throughout the accounting period. You still show the previous year's figures for comparison.

Most dormant companies also don't need an audit. Under section 480 of the Companies Act 2006, a company that has been dormant since it was formed is exempt from audit. A company that has been dormant since the end of its previous financial year is also exempt if it qualifies as small, prepares individual accounts under the small companies regime and doesn't have to prepare group accounts. The balance sheet must include a statement that the company was entitled to exemption from audit under section 480, a statement that the members haven't required an audit under section 476, and a statement that the directors acknowledge their responsibilities for accounting records and preparing accounts. From 1 April 2028, Companies House says companies claiming an audit exemption will need to give an enhanced statement from the directors on the balance sheet.

Preparing dormant accounts for Companies House doesn't remove the duty to prepare accounts for the members. In practice, for a company that has done nothing, the two documents are almost identical.

How to file dormant accounts: online, AA02 or software

You have three routes in 2026, and one of them is about to close.

Filing a dormant company's accounts

1. 1

   Check the company really was dormant for the whole year

   Go through the bank statements and records. Any bank charge, interest, payment or receipt (other than subscriber shares, Companies House fees or late filing penalties) means you file small or micro-entity accounts instead.

   Tip: A fee or penalty paid by a director or third party with no right to be repaid can be left out of the records, according to the AA02 notes.

2. 2

   Find your accounts deadline

   Look the company up on the Companies House register. First accounts are due 21 months after incorporation; after that, 9 months after the year end.

3. 3

   Choose the filing route

   Use the Companies House online dormant accounts service (it has built-in checks and includes the required statements), paper form AA02 if you qualify, or accounting software.

   File your accounts with Companies House
4. 4

   Approve and file

   The board approves the accounts and a director authorises them. A company secretary can't approve the annual accounts.

5. 5

   Keep the confirmation of filing

   Save the acceptance email. Companies House rejects accounts with missing statements or wrong period dates, and a rejection doesn't stop the clock.

The online service. Companies House's online dormant accounts service builds the balance sheet for you, adds the required statements and blocks common errors. It's free and is the simplest route for most small dormant companies, including companies limited by guarantee.

Paper form AA02. The AA02 is a one-page template for dormant company accounts. Its guidance notes set tight limits: it's only for companies limited by shares that have never traded, where the only transaction in the records is the issue of subscriber shares, and that aren't subsidiaries. You can't use it if the company is a charity, is limited by guarantee, has no shares, or prepares accounts under International Accounting Standards. A company that traded in the past and is now dormant can't use AA02 either; it uses the online service or software instead. Paper takes longer to process, so leave plenty of time before the deadline.

Software. Companies House announced that from 1 April 2028, all accounts must be filed in iXBRL format using commercial software, and the web and paper routes will close for accounts. The guidance on dormant subsidiaries already says you can file on paper only until that date. Plan now for how a dormant company will file after April 2028: cheap or free iXBRL tools exist, or an accountant can file for you.

Dormant subsidiaries have a separate option. A subsidiary that's dormant throughout the year, with a UK parent, can be exempt from preparing and filing accounts if the parent guarantees it (form AA06) and the members agree. All three documents, including the parent's consolidated accounts, must reach Companies House before the subsidiary's accounts are due.

Deadlines and penalties are the same as for trading companies

Companies House guidance says you have the same time to file dormant accounts as any other accounts, and the same late filing penalties apply. Being dormant is also on Companies House's list of reasons that usually don't succeed on appeal. Failing to deliver accounts on time is a criminal offence for the directors, as well as triggering the automatic penalty against the company.

The late filing penalty for a private company is £150 if accounts are up to a month late, £375 between one and three months, £750 between three and six months, and £1,500 if more than six months late. The penalty doubles if the accounts were also late the year before. For a dormant company with a few pounds in the bank, a £1,500 penalty can easily be more than the company is worth, and the directors end up paying it to keep the company alive.

Separately, Companies House can now issue financial penalties for other filing offences, such as a missing confirmation statement. Its published scale runs from £250 to £2,000 depending on how serious the offence is and how many times it has happened. A company that keeps missing filings can also be struck off. If it's struck off, any money left in its bank account passes to the Crown, and getting the company back means paying £341 for administrative restoration plus any outstanding filings.

Worked example: a company that sits dormant, then restarts

Priya incorporates Kestrel Studio Ltd on 10 February 2026 to secure the name for a design business she plans to start later. She takes 100 £1 shares and pays the £100 into a business account that charges no fees and pays no interest. She tells HMRC the company is dormant using the online service as soon as the CT41G letter arrives.

Kestrel Studio Ltd — dormant, then trading

10 Feb 2026

Incorporated. Only transaction: £100 for subscriber shares. Accounting reference date becomes 28 February

Mar 2026

Tells HMRC the company is dormant for Corporation Tax (online, with the UTR from the CT41G)

By 23 Feb 2027

First confirmation statement (review period ends 9 Feb 2027), £50

By 10 Nov 2027

First accounts, for 10 Feb 2026 to 28 Feb 2027, due 21 months after incorporation. Dormant accounts; AA02 allowed (never traded, only subscriber shares)

By 23 Feb 2028

Second confirmation statement, £50

1 Sep 2028

Starts trading. Registers for Corporation Tax again within 3 months after starting to do business

By 30 Nov 2028

Accounts for year to 29 Feb 2028 (still dormant) — filed through software, since it's after 1 April 2028

By 30 Nov 2029

First non-dormant accounts, for year to 28 Feb 2029

A few details are worth drawing out. Priya pays the £50 confirmation statement fee from her own card each year rather than from the company account. Companies House filing fees are one of the items ignored in the dormancy test, so the company stays dormant either way, but paying personally keeps the bank statement completely blank, which makes the accounts trivial.

Her first accounts cover just over 12 months, from 10 February 2026 to the accounting reference date of 28 February 2027, and are due 21 months after incorporation on 10 November 2027. Because the only entry in the company's records is the issue of subscriber shares, she could use paper form AA02 or the online service. The balance sheet shows £100 cash at bank, net assets of £100, and £100 of share capital.

When she starts trading on 1 September 2028, Priya registers the company for Corporation Tax again and doesn't need to tell Companies House: her next accounts, for the year to 28 February 2029, will be ordinary small or micro-entity accounts, which show the company is active. For tax, HMRC's restart guidance says the Corporation Tax accounting period starts when the company restarts business activities. Her first period therefore runs from 1 September 2028 to 28 February 2029. Corporation Tax for it is due 9 months and 1 day after the end of the accounting period, so by 1 December 2029, and the Company Tax Return is due 12 months after the end of the accounting period, by 28 February 2030.

Total cost of two dormant years: two confirmation statement fees of £50, no accounts fees, and an hour or two of her own time, or an accountant's fee if she prefers.

Keeping a company dormant vs closing it

If you're unsure whether you'll use the company again, compare the running costs of dormancy with the one-off cost of closing and, if needed, incorporating again later at £100.

Over five years, a dormant company costs at least five confirmation statement fees and five sets of accounts. That's worth paying for a valuable name, a company with a trading history a lender or client cares about, or a company that's waiting on money. It's not worth paying to keep an empty shell "just in case". Remember too that anything left in a company when it's dissolved, including cash in its bank account, passes to the Crown, so empty the account properly before applying.

Common mistakes with dormant companies

• Assuming dormant means "nothing to file". Accounts and the confirmation statement are due every year. Most penalties on dormant companies come from this belief.
• Filing dormant accounts when the bank account had activity. Bank charges, interest or a payment to an accountant are significant transactions. Companies House can reject the accounts, and filing accounts that are wrong is the directors' responsibility.
• Telling Companies House but not HMRC, or the reverse. They're separate. HMRC will keep sending notices to deliver returns until you tell it the company is dormant.
• Ignoring a notice to deliver a Company Tax Return. Once HMRC sends one, the return is due even if the company was dormant. HMRC charges £200 for a return filed late, rising if it stays late.
• Using AA02 for a company that used to trade. AA02 is only for companies that have never traded and are limited by shares. Use the online service instead.

Every year for a dormant company

0/6

• Check the bank statements show nothing except subscriber shares, filing fees or late penalties
• File the confirmation statement within 14 days of the review date, with every director's personal code
• File dormant accounts before the deadline shown on the register
• Act on any HMRC notice to deliver a Company Tax Return
• Read post to the registered office and emails to the registered email address
• Plan to file through software for accounts due after 1 April 2028

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Restarting a dormant company

You don't need permission or a form at Companies House to restart. GOV.UK says the next set of non-dormant accounts you file will show that the company is no longer dormant. The steps are all on the tax side: register for Corporation Tax again through your business tax account (HMRC expects this within 3 months after starting to do business), register for PAYE if you'll pay salaries, and register for VAT if you pass the threshold or want to register voluntarily.

You can keep the existing accounting reference date with Companies House. If the new trading pattern would suit a different year end, you can change it with form AA01. You can shorten the current period as often as you like for now, but you can't extend a period beyond 18 months, and you can usually only extend once in five years. Companies House has said that from 1 April 2028, shortening more than once in five years will need a business reason. Any change must be made before the accounts for the affected period are overdue. Our Corporation Tax guide covers rates and payment dates once you're trading again.

Official links

• Dormant companies and associationsHMRC and Companies House definitions
• Tell HMRC your company is dormantOnline service; needs the 10-digit UTR
• Life of a company: accounts (dormant companies section)Significant transactions, audit exemption, AA02 limits
• File your company's annual accountsOnline dormant accounts service
• File your confirmation statementStill due every year when dormant
• Restarting a non-trading or dormant companyCorporation Tax steps on restart
• Companies House feesConfirmation statement, strike-off and restoration fees

What to do next

Look the company up on the Companies House register today and note the next confirmation statement and accounts dates. Check the bank statements to see whether the company is really dormant for Companies House, and tell HMRC if you haven't already. If you're keeping the company for a future business, our Companies House filing guide has the full calendar, and the budget planner helps you put the yearly costs into your plans. If you've decided you won't need it, the closing a limited company guide explains the £13 strike-off route.

This is general information, not legal or tax advice — confirm on the official source or with a professional.

Frequently asked questions

Does a dormant company need to file accounts?

Yes. Every limited company must deliver annual accounts to Companies House whether it trades or not. A company that had no significant accounting transactions in the year and qualifies as small can file simple dormant accounts: a balance sheet and notes, with no profit and loss account and no audit. The deadline is the same as for trading companies, usually 9 months after the year end.

Does a dormant company need a confirmation statement?

Yes. Every company, including dormant and non-trading ones, must file a confirmation statement at least once every 12 months and pay the £50 online fee (£110 on paper). All directors must have verified their identity with Companies House, or the statement won't be accepted. Not filing can lead to a fine of up to £5,000 and strike-off.

How do I tell HMRC my company is dormant?

Use the GOV.UK service 'Tell HMRC your company is dormant for Corporation Tax'. You need the company name, its 10-digit Corporation Tax UTR and, if it ever traded, the date it stopped. If you can't use the online service, contact HMRC Corporation Tax enquiries by phone or post. If HMRC has already sent a notice to deliver a return, you still have to file that return.

Can a dormant company have a bank account?

Yes, but watch what goes through it. Bank charges, interest received or any payment the company should record are significant accounting transactions, so the company isn't dormant for Companies House in that year. Interest is also income, which means it isn't dormant for Corporation Tax either. Some owners close the account or move to one with no charges and no interest.

Is it cheaper to keep a company dormant or close it?

Keeping a company dormant costs the £50 confirmation statement fee each year, plus time or an accountant's fee for dormant accounts. Striking it off costs £13 online, once. If you want the name, may restart, or are waiting on a final payment, dormancy makes sense. If not, closing avoids years of filings and penalty risk.

How do I restart a dormant company?

Tell HMRC by registering for Corporation Tax again within 3 months after starting to do business. Your Corporation Tax accounting period starts on the day you restart, but you can keep the same accounting reference date at Companies House. You don't need to tell Companies House: your next non-dormant accounts show you're trading. Register for VAT and PAYE again if you need them.

Sources & verification

Figures on this page were checked against the sources below when it was last reviewed on 12 October 2026. Each rate and limit is stored once with its own official source and review date, and official update channels are monitored daily so changes are picked up. How we verify

1. 1.Dormant companies and associations (printable guide) — GOV.UK (HMRC / Companies House) · accessed 12 October 2026
2. 2.Tell HMRC your company is dormant for Corporation Tax — GOV.UK (HMRC) · accessed 12 October 2026
3. 3.Life of a company: annual requirements — accounts (section 13, dormant companies) — Companies House · accessed 12 October 2026
4. 4.Dormant company accounts (DCA) form AA02, version 6.0 (03/26) — Companies House · accessed 12 October 2026
5. 5.Confirmation statement guidance — Companies House · accessed 12 October 2026
6. 6.Companies House fees — Companies House · accessed 12 October 2026
7. 7.Restarting a non-trading or dormant company — GOV.UK (HMRC) · accessed 12 October 2026
8. 8.COM1040 — Accounting periods: company accounting periods: dormancy — HMRC internal manual · accessed 12 October 2026
9. 9.Companies House to bring in changes to accounts filing from April 2028 — Companies House · accessed 12 October 2026