A company that is not doing business still has to file accounts at Companies House every year. If it has had no significant transactions it can file dormant accounts: a balance sheet with a short statement, and no profit and loss account. This article explains what counts as dormant and how to file with the Dormant Accounts Wizard in Tax Optimiser.
What counts as dormant
For Companies House, a company is dormant if it has had no significant accounting transactions during the financial year. A few transactions are ignored, so the company can still be dormant if the only ones were:
- paying Companies House fees (for example the confirmation statement fee or a change of name);
- penalties for filing accounts late;
- money paid for shares when the company was incorporated.
Bank interest, a director’s loan, or buying and selling anything means the company is not dormant for that year.
Heads up — HMRC has its own idea of “dormant”, which is about whether the company is liable to Corporation Tax. If HMRC sends a notice to file a Company Tax Return you must file it (or tell HMRC the company is dormant) even though Companies House only needs the dormant accounts.
What dormant accounts contain
- a balance sheet, with the prior-year figures, usually showing just the share capital and the matching amount owed by shareholders or held as cash;
- a statement that the company was dormant and is entitled to audit exemption under section 480 of the Companies Act 2006;
- notes, where required;
- the name of the director who approved and signed the balance sheet.
There is no profit and loss account and no directors’ report on the public filing.
Filing with the Dormant Accounts Wizard
If you signed up through the dormant company route, or the period is marked as dormant, clicking Run Companies House Wizard on the accounting period opens the Dormant Accounts Wizard. It has three steps.
1. Company Details
Check the registered company name, Companies House number and registered address. Click Sync now to refresh them from Companies House if anything is missing or out of date.
2. Confirm Dormancy
Check the accounting period dates, enter the Dormant from date, and tick I confirm that this company was dormant for the entirety of the accounting period above. If the company has never traded since incorporation, tick that box too.
3. Submit
Review the accounts and submit them to Companies House. You’ll need the company’s authentication code. The submission status updates when Companies House accepts the filing.
To mark an existing period as dormant, open View Accounts, open Company Information and tick Dormant company (and Company has never traded if that applies). The accounts switch to the dormant wording, including the section 480 statement.
When dormant accounts are not enough
If the company traded at any point during the year it must file normal accounts — micro-entity or small — for that year, even if it is dormant now. A company that has traded in the past but was dormant for the whole of this year can still file dormant accounts.
Does a dormant company have to file accounts?
Yes. Every company on the register must file annual accounts with Companies House, including dormant companies and those that have never traded, and must also file a confirmation statement each year.
What can a dormant company pay without losing dormant status?
Companies House fees, late filing penalties and the money paid for shares on incorporation. Any other transaction, including bank interest, makes the company active for that year.
Does a dormant company need a profit and loss account?
No. Dormant accounts are a balance sheet with a statement that the company was dormant and is exempt from audit under section 480, plus any required notes.
Is dormant for Companies House the same as dormant for HMRC?
No. HMRC treats a company as dormant for Corporation Tax when it is not carrying on business or receiving income. If HMRC sends a notice to file a Company Tax Return, you must respond even if the company is dormant.