How do I tell HMRC my new company is dormant?

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This article explains the process of registering a new company as dormant. We also provide a free template letter that can be used to inform HMRC of the new company’s dormant status.

There’s no special process for forming a new dormant company and there’s a number of reasons people choose to form and then keep a company dormant. You can follow our step by step guide to forming a new company and form the company online. As part of the company incorporation, you can select a SIC code to tell Companies House the company plans to be dormant.

It's easy to form a new dormant company

Inform Direct's straightforward step by step process helps you get it right and gives you everything you'll need - all for just £19.99 + VAT.

Form company

To retain dormant status you must make sure that formation costs are paid privately (or by another company) and not by the dormant company itself.

HM Revenue & Customs will automatically be made aware by Companies House that the company has been formed. They should then shortly contact you with their “Information for new companies”.

HMRC’s “Information for new companies”

Within 7 days of the new company being formed, HMRC will send a letter to the company’s registered office address, which you chose when setting up the company.

Below is a copy of HMRC’s standard letter to new companies. It includes the company’s Unique Taxpayer Reference number (UTR): make sure you keep it safe as this identifies the company with HMRC.

 

Registering company as dormant with HMRC - Corporation tax information for new companies

It is very important that you respond to this HMRC letter and if you don’t, HMRC will expect a corporation tax return and penalties will be triggered if you fail to supply one (even if no tax is due).  We’ve created a template reply which you can adapt and use.  Make sure you include the Unique Taxpayer Reference (UTR) code to identify the company and send to the HMRC office that the letter came from.

HMRC should acknowledge your letter within 14 days. Below is an example of what you should receive.

 

HMRC confirmation that a company will be treated as dormant

Once you receive the acknowledgment will then be able to maintain the company with the minimum of ongoing administration requirements. Importantly, you will not be required to submit a corporation tax return for the company.

Like other companies, the directors of a dormant company manage it on behalf of its shareholders and are responsible for holding meetings, maintaining statutory registers and ensuring that necessarily filings are made with HMRC and Companies House. For a dormant company, these would still include:

  • confirmation statement must be submitted to Companies House
  • Dormant company accounts should be submitted annually to Companies House. Although dormant companies are not excused from filing accounts, they can produce much simpler accounts than trading companies.
  • Whenever a Director or Company Secretary is appointed or terminated (or their personal details change), a form needs to be submitted to Companies House.
  • Companies House also need to be notified of any change to the company’s registered office address or, if it has one, a SAIL address.

To make the ongoing administration of a company that will be dormant as straightforward as possible, you might consider aligning the due dates for the confirmation statement and dormant company accounts, making them something easy to remember (like 31st December each year). It’s possible to change the company’s accounting reference date and you can change the date the annual confirmation statement is due by filing the first confirmation statement early.

Inform Direct makes it very easy to maintain a dormant company.  Not only does it provide step-by-step wizards to enable you to complete both the required confirmation statement and dormant company accounts but will also send you timely email reminders when the date to file these documents draws near.

What to do if the company starts trading

There are a number of requirements the company must continue to meet in order to retain its status as a dormant company. Many dormant companies will, at some point in their existence, become active.

If your dormant company becomes active (for example by starting to trade), you must notify HMRC within three months. You can write to HMRC at the same address, quoting your company’s Unique Taxpayer Reference. It’s probably easier, however, to use HMRC’s online registration service to notify them that the company is now active.


Inform Direct makes it quick and easy to maintain statutory registers, manage company records and submit filings to Companies House at the touch of a button.


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