{"id":33032,"date":"2024-04-12T14:29:24","date_gmt":"2024-04-12T13:29:24","guid":{"rendered":"https:\/\/taxfix.com\/en-uk\/?p=33032"},"modified":"2025-06-04T11:50:12","modified_gmt":"2025-06-04T10:50:12","slug":"what-is-a-dormant-company","status":"publish","type":"post","link":"https:\/\/taxfix.com\/en-uk\/limited-companies\/what-is-a-dormant-company\/","title":{"rendered":"What is a dormant company vs a nontrading company?"},"content":{"rendered":"\n<p>Differentiating whether you have a dormant company or a non-trading one is based on one small difference. We\u2019ll get into that juicy tidbit and more. Let\u2019s talk all things <a href=\"https:\/\/taxfix.com\/en-uk\/glossary\/limited-company\/\">limited companies<\/a> and dormant and non-trading activity (or lack thereof).&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">What is a dormant company?<\/h2>\n\n\n\n<p>A dormant company is a company that has been incorporated at <a href=\"https:\/\/taxfix.com\/en-uk\/glossary\/companies-house\/\">Companies House<\/a> but does not currently have any business activity. In a nutshell, it&#8217;s a company with no income or expenses.<\/p>\n\n\n\n<p>Business activity includes: buying, selling, renting, advertising, employing staff and\/or earning interest.<\/p>\n\n\n\n<p>Dormant companies can become dormant straight after they\u2019re incorporated, or after being in business for a while. They don\u2019t need to pay <a href=\"https:\/\/taxfix.com\/en-uk\/glossary\/company-tax\/\">Corporation Tax<\/a>.<\/p>\n\n\n\n<p><a href=\"https:\/\/www.gov.uk\/dormant-company\/dormant-for-corporation-tax\" target=\"_blank\" rel=\"noreferrer noopener\">According to HMRC<\/a>, your company is dormant (a.k.a you don\u2019t have to pay) for Corporation Tax if it\u2019s:<\/p>\n\n\n<\/div> <!-- .c-body -->\n\n<div class=\"b-columns-mini m-align-left\">\n    <div class=\"b-columns-mini__container\">\n\n        \n        \n        <div class=\"b-columns-mini__item m-nude\">\n                                    \n            <div class=\"b-columns-mini__item-content\">\n                <div class=\"b-block-body\">\n                    <ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Stopped trading and has no other income<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">New and hasn\u2019t started trading<\/span><\/li>\n<\/ul>\n\n                <\/div>\n            <\/div>\n        <\/div>\n\n        \n        \n        <div class=\"b-columns-mini__item m-nude\">\n                                    \n            <div class=\"b-columns-mini__item-content\">\n                <div class=\"b-block-body\">\n                    <ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">An unincorporated association\/club owing less than \u00a3100 Corp Tax<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">A flat management company<\/span><\/li>\n<\/ul>\n\n                <\/div>\n            <\/div>\n        <\/div>\n\n        \n        \n    <\/div>\n<\/div> <!-- .b-columns-mini -->\n\n<div class=\"c-body\">\n\n\n\n\n<h2 class=\"wp-block-heading\">What is a non-trading company?<\/h2>\n\n\n\n<p>Similarly to a dormant company, a non-trading company is also one that does not currently have any business activity. Once a company starts and stops trading, then it\u2019s considered a non-trading company.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Differences between a dormant and non-trading company<\/h2>\n\n\n\n<p>The main difference is that while non-trading companies are inactive, transactions, like investment income or sale of goods, are still allowed.&nbsp;These are usually happening in the background and not &#8220;actively&#8221;. A dormant company cannot have transactions.<\/p>\n\n\n\n<p>Another difference arises when you go to file a tax return\u2026 or don\u2019t. Dormant companies don\u2019t need to pay Corporation Tax and therefore do not need to file a tax return to HMRC. But, they will need to file dormant accounts with Companies House.<\/p>\n\n\n\n<p>Non-trading companies, on the other hand, will need to do both. Even if you don&#8217;t owe corporation tax, you&#8217;ll still need to file a company tax return to HMRC and company accounts to Companies House.<\/p>\n\n\n<\/div> <!-- .c-body -->\n\n<div class=\"b-cta-mini m-yellow m-align-left\">\n    \n    <div class=\"b-cta-mini__content\">\n\n        \n        <h2 class=\"b-cta-mini__title\">Don&#8217;t let the world of limited company taxes faze you\ud83d\udea8<\/h2>\n\n        \n        \n        <div class=\"b-cta-mini__body\">\n            <div class=\"b-block-body\"><p>If you&#8217;re confused whether your company is dormant or non-trading, fret not! Our accredited accountants are here to help you. It&#8217;s a smooth-sailing, stress free process. Get started now, thank yourself later.<\/p>\n<\/div>\n        <\/div>\n\n        \n        \n        <div class=\"b-cta-mini__action\">\n\n            <a href=\"https:\/\/taxfix.com\/en-uk\/assessment\/companyReturn\" class=\"c-button m-large  m-mobile-fullwidth\">Let&#039;s go<\/a>\n\n\n        <\/div>\n\n        \n    <\/div>\n<\/div> <!-- .b-cta-mini -->\n\n<div class=\"c-body\">\n\n\n\n\n<h2 class=\"wp-block-heading\">Can a dormant company trade?<\/h2>\n\n\n\n<p>Alas, no. A dormant company cannot trade. This means you cannot carry out any business or make any money through your limited company.&nbsp;<\/p>\n\n\n\n<p>But sometimes, things change. If you\u2019re planning to jump-start your limited company again, then you\u2019ll need to let HMRC and Companies House know. Or, the easier way would be to get your handy dandy accountant to inform them on your behalf.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">When do company accounts need to be filed?<\/h2>\n\n\n\n<p>There are two main dates that you need to keep in mind. Another point to highlight is that these dates will be different for everyone depending on when your business&#8217; financial year starts and ends.<\/p>\n\n\n\n<ol class=\"wp-block-list\">\n<li>You need to file your company tax return to HMRC within 12 months of your accounting period end<\/li>\n\n\n\n<li>You need to file your annual company accounts to Companies House within 9 months after the accounting period end<\/li>\n<\/ol>\n\n\n<\/div> <!-- .c-body -->\n\n<div class=\"b-highlight-mini m-nude m-align-left\">\n    <div class=\"b-block-body\">\n        <p><span style=\"font-weight: 400;\"><strong>Fun<\/strong> <strong>fact<\/strong> (Okay, that might be a stretch&#8230;): if the date you either need to file a tax return or your annual accounts fall on a bank holiday or a Sunday, you still need to submit your documents before this date or you will get penalised by HMRC\ud83d\ude31<\/span><\/p>\n\n    <\/div>\n<\/div> <!-- .b-highlight-mini -->\n\n<div class=\"c-body\">\n\n\n\n\n<p>Here are some example dates:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Your accounting period ends on 31st December 2024<\/li>\n\n\n\n<li>You have to file your company tax return by 31st December 2025 to HMRC<\/li>\n\n\n\n<li>You have to file your annual company accounts by 30th September 2025 to Companies House <\/li>\n<\/ul>\n\n\n\n<p><a href=\"https:\/\/find-and-update.company-information.service.gov.uk\/\" target=\"_blank\" rel=\"noreferrer noopener\">Search the Companies House register<\/a> to find out when your company accounts are due.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">How to file dormant company accounts&nbsp;<\/h2>\n\n\n\n<p>A company usually won\u2019t have to pay corporation tax or file a company tax return once you tell HMRC that your company is dormant. The only exception to this is if HMRC gets in touch with you to ask you to file. In this case, you must file.<\/p>\n\n\n\n<p>On the other hand, you will need to submit a confirmation statement and your annual accounts to Companies House.<\/p>\n\n\n\n<p>Luckily, it&#8217;s fairly easy to sort! You can sort it all yourself or use an accountant to file your dormant company accounts with Companies House!<\/p>\n\n\n<\/div> <!-- .c-body -->\n\n<div class=\"b-cta-mini m-yellow m-align-left\">\n    \n    <div class=\"b-cta-mini__content\">\n\n        \n        <h2 class=\"b-cta-mini__title\">Get your limited company taxes sorted, for less\u2728<\/h2>\n\n        \n        \n        <div class=\"b-cta-mini__body\">\n            <div class=\"b-block-body\"><p>Online, quick and for a fixed price. Plus, an accredited accountant sorts it all for you!<\/p>\n<\/div>\n        <\/div>\n\n        \n        \n        <div class=\"b-cta-mini__action\">\n\n            <a href=\"https:\/\/taxfix.com\/en-uk\/limited-company-tax-service\/\" class=\"c-button m-large  m-mobile-fullwidth\">Learn more<\/a>\n\n\n        <\/div>\n\n        \n    <\/div>\n<\/div> <!-- .b-cta-mini -->\n\n<div class=\"c-body\">\n\n","protected":false},"excerpt":{"rendered":"<p>Differentiating whether you have a dormant company or a non-trading one is based on one small difference. We\u2019ll get into that juicy tidbit and more. Let\u2019s talk all things limited companies and dormant and non-trading activity (or lack thereof).&nbsp; What is a dormant company? A dormant company is a company that has been incorporated at [&hellip;]<\/p>\n","protected":false},"author":18,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[503],"tags":[504,102,502],"class_list":["post-33032","post","type-post","status-publish","format-standard","hentry","category-limited-companies","tag-corporation-tax","tag-hmrc","tag-limited-company"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.8 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>What is a dormant company vs a nontrading company? &#8211; Taxfix<\/title>\n<meta name=\"description\" content=\"There are differences between a dormant company and a non-trading company you should know when filing your tax return or company accounts.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/taxfix.com\/en-uk\/limited-companies\/what-is-a-dormant-company\/\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"What is a dormant company vs a nontrading company? 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