Does Your Company Need to File Dormant Accounts?
If your company is not trading, you might assume there’s no need to file accounts with Companies House. However, even dormant companies are required to submit certain filings to stay compliant with UK law. In this article, we’ll explain what dormant accounts are, when they need to be filed, and why they matter.
What Are Dormant Accounts?
Dormant accounts are simplified financial statements submitted to Companies House for companies that have had no significant financial transactions during a financial year. A company is considered dormant if it has had no trading activity, meaning no sales, purchases, or expenses (except for standard bank charges and Companies House filing fees).
HMRC, however, has a different definition of dormancy for Corporation Tax purposes. A company may be considered dormant by HMRC if it is not trading, but it may still need to file accounts with Companies House.
Does Your Company Need to File Dormant Accounts?
If your company is dormant, yes. Even if your company is dormant, you still have a legal obligation to file accounts.
Failure to file accounts on time can result in penalties and even the risk of your company being struck off the register.
Why File Dormant Accounts?
Even if your company is not trading, filing dormant accounts serves several important purposes:
1. Legal Compliance
All UK limited companies, including dormant ones, must submit annual accounts to Companies House. Failure to do so can result in fines of up to £1,500 and possible dissolution of the company.
2. Maintaining the Company’s Legal Status
Filing dormant accounts keeps your company active on the Companies House register. This is essential if you plan to restart trading in the future or keep the business name reserved.
3. Avoiding Unnecessary Tax Investigations
If your company is dormant but does not file accounts, HMRC may assume that it is trading and fail to recognize its dormant status, potentially leading to unwanted tax assessments or compliance checks.
4. Keeping Creditors and Investors Informed
Even if your company is not trading, dormant accounts provide transparency, confirming to creditors, investors, and business partners that the company has no financial activity.
How to File Dormant Accounts
You can file online via Companies House or you can use Standard Accounting's online platform to make sure the process simple and easy.
To file dormant dormant accounts through Standard Accounting, companies can follow these steps:
- Go to the Standard Accounting search page.
- Search for your company name or number to locate the correct company details.
- Add the "Prepare and file dormant/not trading company accounts" service to your order, indicating your intention to make the company dormant.
- Proceed to the checkout page to finalise the request.
- Follow the steps shown on the payment complete page
