If a company has ceased operations and has no other source of income, it is usually classified as dormant for Corporation Tax purposes.
HMRC can also send a notification if they think a company is dormant. This notice will state that a company or association is dormant and is not required to pay Corporation Tax or file Company Tax Returns.
Even if a limited company is dormant, it must still file annual accounts and a confirmation statement with Corporation Tax and Companies House. A company defined as ‘small’ by Companies House can instead file ‘dormant accounts’ and doesn’t have to include an auditor’s report.
A dormant company must also deregister for VAT and close any unused PAYE schemes within 30 days of becoming dormant. A company can stay dormant indefinitely, however, there are costs associated with this option. This might usually be done if, for example, a company is restructuring its operations or wants to retain use of a company name, brand, or trademark.
If you are looking to know what the requirements are for a dormant company, please feel free to Book a free consultation now.