Making your company dormant is not simply a matter of stopping trade. Directors must ensure that the company has no significant accounting transactions, notify HMRC correctly, and continue meeting Companies House filing obligations. Failure to follow the correct process can result in rejected filings, financial penalties, or loss of dormant status. This comprehensive guide explains how to make your company dormant properly, how to maintain that status, and how to choose the safest filing method.
A company is considered dormant when it has had no significant accounting transactions during its financial year. This definition applies to Companies House reporting requirements and Corporation Tax obligations. If you need a full breakdown of the legal definition, accounting rules, and permitted transactions, review What Are Dormant Accounts? before proceeding.
Generally, permitted transactions while dormant include:
Payment for shares issued on incorporation
Fees paid to Companies House
Certain civil penalties
Any income, expense, payroll activity, or business contract will usually mean the company is active.
Experience insight: A common issue we see is directors overlooking small recurring payments such as bank charges, website renewals, or software subscriptions. Even minor transactions can invalidate dormant status, requiring full accounts instead of simplified dormant accounts.
Directors may decide to make a company dormant for several reasons:
Temporary pause in trading
Future business plans not yet launched
Holding intellectual property or brand names
Project delays or restructuring
Keeping a company name protected
Maintaining dormancy can preserve flexibility while reducing accounting complexity, but it does not remove compliance responsibilities.
The company must stop selling goods or services, issuing invoices, entering contracts, and paying operational expenses.
Examine bank accounts and accounting records to confirm no significant transactions have occurred during the financial year.
If the company was previously trading, you must notify HMRC that it is now dormant for Corporation Tax purposes. This prevents Corporation Tax returns from being issued unnecessarily.
Even dormant companies must keep statutory registers and maintain basic accounting records.
Dormant companies must still file accounts with Companies House, usually within 9 months of the accounting reference date (for private limited companies).
For detailed filing instructions, see How To File Dormant Accounts.
Important: Dormant status does not remove your obligation to file annual accounts and confirmation statements. Penalties apply automatically if deadlines are missed.
Directors must continue to:
File dormant accounts each year
Submit confirmation statements
Maintain accurate company details
Monitor correspondence from Companies House
Ensure no disqualifying transactions occur
For a breakdown of deadlines and escalating penalties, review Dormant Company Deadlines & Penalties.
Assuming “no trading” automatically means dormant
Forgetting to notify HMRC
Leaving business subscriptions active
Misunderstanding accounting reference dates
Missing filing deadlines
Submitting incorrect dormant accounts
These errors often result in rejected filings or avoidable penalties.
Once your company qualifies as dormant, you must decide how to file your accounts. Directors can file directly themselves (DIY) or use an online filing service.
Method | Speed | Compliance Risk | Best For |
|---|---|---|---|
DIY Filing | Moderate | Higher if inexperienced | Confident, experienced directors |
Online Filing Service | Fast | Lower | Directors seeking efficiency and reassurance |
Filing dormant accounts yourself involves completing the appropriate form and submitting it to Companies House before the deadline.
No service fee
Full control over submission
Suitable for directors familiar with filing procedures
Technical errors leading to rejection
Incorrect share capital reporting
Misstated accounting periods
Late filing penalties
Important: Rejected filings close to the deadline can result in penalties even if you attempted to submit on time.
Online filing services guide directors through a structured submission process, often including validation checks to reduce errors before submission.
Guided step-by-step process
Built-in validation
Submission confirmation
Reduced administrative burden
Time efficiency
For many directors, the modest service fee provides reassurance and reduces compliance risk.
While DIY filing appears cheaper, directors should consider the broader picture:
Time spent researching rules
The impact of financial penalties
Administrative stress
Risk of repeated late filing fines
For many businesses, reducing compliance risk outweighs the cost difference.
If there are no future plans for the company, voluntary strike off may be more appropriate than continued dormancy. However, if you intend to trade again or wish to retain the company name, maintaining dormancy may be preferable.
Explore additional support resources in our Dormant Filing Guides to understand your options fully.
If the company resumes trading, you must:
Inform HMRC within 3 months
Maintain full accounting records
File full statutory accounts instead of dormant accounts
Submit Corporation Tax returns where required
Attempting to trade while filing dormant accounts exposes directors to compliance risk.
Making your company dormant can reduce reporting complexity, but it requires careful monitoring and correct filing. Directors must ensure the company genuinely qualifies as dormant and that annual filing obligations continue to be met.
For directors seeking efficiency, reduced risk, and structured guidance, using a secure online filing system provides reassurance that dormant accounts are prepared and submitted correctly.
