Yes. In many cases, a dormant UK company should notify HMRC that it is dormant for Corporation Tax.However, there is an important qualification: being dormant does not automatically mean that a company has no HMRC obligations. Whether you need to contact HMRC depends on how the company became dormant, whether HMRC has already recognised its dormant status, and whether the company has other tax registrations such as VAT or PAYE.

A dormant company also remains a legal entity. Its Companies House obligations continue even when it is not trading. This distinction is particularly important for founders who incorporate a company but delay launching, entrepreneurs who temporarily stop trading, and overseas directors who assume that a company that generates no revenue can simply be left alone.

What Is a Dormant Company?

A dormant company is broadly one that is not carrying on business activity and has no other income for Corporation Tax purposes. HMRC gives examples including:

• A newly incorporated company that has not started trading
• A company that has stopped trading and has no other income
• Certain companies established to hold assets that are unlikely to generate income in the near future
• Certain flat management companies

HMRC's definition is concerned with Corporation Tax activity, and it is not identical to the definition used by Companies House. That difference is easy to overlook. A company can therefore be dormant for Corporation Tax purposes while still having filing responsibilities at Companies House.

Do You Have to Tell HMRC That Your Company Is Dormant?

If your company has stopped trading and has no other income, you can tell HMRC that it is dormant for Corporation Tax. HMRC provides an online service specifically for this purpose. You will normally need:

• The company's name
• Its 10-digit Unique Taxpayer Reference (UTR)
• The date the company stopped trading, if it previously traded

You can also notify HMRC by telephone or post if you cannot use the online service. Tax agents can notify HMRC on behalf of clients using the appropriate agent arrangements. The practical reason for notifying HMRC is important: it can prevent you from having to submit unnecessary Company Tax Returns while the company remains dormant. Once HMRC has accepted the company as dormant, it generally will not require another Company Tax Return unless HMRC asks for one or the company starts trading again.

Why Telling HMRC Matters

It is tempting to assume that if a company has made no sales, there is nothing to tell HMRC. That can be a costly assumption. If HMRC has not been told that the company is dormant, it may still expect a Company Tax Return. HMRC's guidance specifically warns that companies that have not informed it of their dormant status may remain subject to Corporation Tax filing requirements, and failure to submit a required return can result in penalties.

For a founder, the difference can be substantial. Imagine that James incorporates a UK company in January but decides not to launch until the following year. The company has no customers, no sales and no investment income. If the company qualifies as dormant for Corporation Tax, James should make sure HMRC's records reflect that status rather than simply assuming that no tax return is required. The lesson is straightforward:

No trading activity does not necessarily mean no notification is required.

When Does a New Company Become Dormant?

A newly incorporated company can be dormant for Corporation Tax before it starts trading. This is common among founders who incorporate before launching their business. For example, a company might be incorporated in March, but the founder does not begin selling products until September. During the period before trading starts, the company may be dormant for Corporation Tax purposes, provided its activities do not amount to trading or otherwise bring it within Corporation Tax.

HMRC recognises certain preliminary activities and expenditure associated with deciding whether to start a business as pre-trading rather than trading activity. That said, "I haven't made money yet" is not the same as "the company is dormant." A company can become active before generating revenue.

For example, substantial business operations, commercial activity, receiving income or other activities can affect its Corporation Tax status. The question is therefore not simply whether the company has made a profit. It is whether the company is active for Corporation Tax purposes.

What If the Company Has Stopped Trading?

This is another common situation. Suppose a limited company traded for two years and then stopped accepting customers. The directors intend to keep the company available in case they restart the business later. If it has stopped trading and has no other income, it may become dormant for Corporation Tax purposes.

The directors should consider notifying HMRC of the date trading stopped and the company's dormant status. HMRC allows companies to notify it of dormancy online. However, stopping trading does not erase previous obligations. The company may still need to:

• File a final Company Tax Return covering its active period
• Pay Corporation Tax that is due
• Deal with outstanding VAT
• Close its PAYE scheme if applicable
• File accounts with Companies House
• File confirmation statements
• Maintain appropriate accounting records

Dormancy applies to the company's current status; it does not rewrite its history.

Dormant for HMRC vs Dormant for Companies House

This is perhaps the most important distinction to understand. HMRC and Companies House use different tests and have different filing requirements.

Dormant for Corporation Tax

HMRC generally considers a company dormant for Corporation Tax when it is not active, not trading and not receiving relevant income. Once HMRC has been notified and recognises the company as dormant, another Company Tax Return is generally not required unless HMRC asks for one or the company becomes active again.

Dormant for Companies House

Companies House looks at whether the company has had significant accounting transactions during its financial year. A company can be dormant according to Companies House if it has had no significant transactions.

Certain transactions do not count, including some Companies House filing fees, late filing penalties and the original payment for shares when the company was incorporated. The two concepts overlap, but they are not interchangeable.

Do Dormant Companies Still File Accounts?

Yes. This is where many new directors get caught out. A dormant company still exists as a registered company and normally has ongoing Companies House filing requirements. Companies House states that limited companies must continue to file accounts even if they are dormant. Dormant companies may generally file simpler dormant accounts where the relevant conditions are met.

You also normally need to file a confirmation statement every year. Companies House states that every company, including dormant and non-trading companies, must file a confirmation statement at least once every 12 months while it remains in existence. So a dormant company may have:

No Corporation Tax return → but still annual Companies House filings.

That is perfectly normal.

Does a Dormant Company Have to Pay Corporation Tax?

Generally, a company that is genuinely dormant for Corporation Tax does not have Corporation Tax to pay on trading profits because it has no trading activity or relevant income. But dormant status does not automatically eliminate tax liabilities that arose before the company became dormant. For example:

Company trades until 31 March → stops trading → becomes dormant from 1 April.

The company could still owe Corporation Tax on profits generated before 1 April. The directors must deal with that liability before assuming the company's tax affairs are finished.

What Happens If HMRC Has Already Declared the Company Dormant?

You may not need to separately notify HMRC again. HMRC can sometimes identify a company as dormant and write to it confirming that it does not have to pay Corporation Tax or file Company Tax Returns. If HMRC has already confirmed the company's dormant status, check the correspondence carefully.

Do not assume that because the company is dormant you can ignore every communication from HMRC. If HMRC issues a Notice to Deliver a Company Tax Return, you should not simply ignore it because you believe the company is dormant. HMRC's guidance states that if a company has filed a Company Tax Return or received a notice to deliver one, it may still need to submit the return showing that the company was dormant for that period.

What About VAT?

VAT requires separate attention. A company being dormant for Corporation Tax does not automatically cancel its VAT registration. If your dormant company is VAT registered, HMRC says that:

• If you do not intend to trade again, you should deregister for VAT within 30 days of becoming dormant.
• If you intend to restart trading, you should continue submitting nil VAT returns while the company remains dormant.

This is a crucial distinction.

Example

Sarah owns a dormant consulting company. She intends to restart the business in 18 months and therefore keeps the company alive. If the company remains VAT registered, she cannot simply stop submitting VAT returns. She may need to submit nil returns during the dormant period. If she has no intention of trading again, VAT deregistration may be more appropriate. The right approach depends on the company's circumstances.

What About PAYE?

If the company employs people, dormancy also requires attention to PAYE. HMRC advises that if a company does not plan to restart trading in the tax year, it should close its PAYE scheme. This is another reason why "tell HMRC the company is dormant" should not be treated as a single administrative action that automatically closes every tax registration. You need to review each tax service separately.

What If the Company Has a Bank Account?

A company can have legitimate administrative costs while remaining dormant for certain purposes. However, you should not assume that every transaction is harmless. For Companies House purposes, certain transactions are specifically disregarded when determining dormancy, including certain filing fees.

But transactions involving business income, expenses, investments or other activity can affect the company's status. If the company has substantial ongoing banking activity, investments or income, obtain accounting advice before declaring it dormant.

How to Tell HMRC Your Company Is Dormant

The process is relatively straightforward if the company genuinely qualifies.

Step 1: Confirm the company is dormant

Check that it has stopped trading and has no other income or activity that would prevent dormant treatment.

Step 2: Establish the dormancy date

If the company previously traded, identify the date on which trading stopped.

Step 3: Gather your information

You will generally need:

• Company name
• Company UTR
• Date trading stopped, if applicable

Step 4: Use HMRC's dormant-company service

HMRC provides an online service for notifying it that a company is dormant for Corporation Tax.

Step 5: Keep evidence

Retain confirmation of the notification and any HMRC correspondence. This becomes useful if HMRC later asks why a Company Tax Return was not filed.

What If You Start Trading Again?

Dormant status is not permanent. If the company restarts trading, you need to tell HMRC. HMRC states that a dormant company that starts trading again must be registered for Corporation Tax. The company will then have new Corporation Tax obligations.

HMRC's guidance states that the company should prepare the relevant statutory accounts and Company Tax Returns after the relevant accounting periods, with Corporation Tax generally due nine months and one day after the end of the accounting period and the Company Tax Return due within 12 months. The important point is to notify HMRC promptly when the company moves from dormant to active.

What Happens If You Do Nothing?

Doing nothing is one of the least attractive options. If HMRC expects a Company Tax Return and you fail to file it, penalties can arise. The company could also accumulate Companies House penalties if it fails to file its accounts on time. A company that remains dormant still has annual Companies House obligations.

In serious cases, persistent failure to meet Companies House requirements can contribute to the company being struck off. Dormancy is therefore best viewed as a status that needs to be managed, not as permission to stop monitoring the company.

Dormant Companies and Overseas Founders

This issue is particularly relevant to international entrepreneurs. A founder living outside the UK may incorporate a British company months before launching the business. The company may have:

• UK registered office
• Overseas directors
• No employees
• No customers
• No revenue

If it genuinely has not started trading, it may qualify as dormant for Corporation Tax. But living abroad does not remove the company's UK filing obligations. The company still needs to comply with Companies House requirements and, where appropriate, HMRC requirements.

For global founders using a UK company formation and management platform such as IncorpUK, it is useful to distinguish between company administration, Companies House compliance and HMRC tax compliance. They are related, but they are not the same thing.

Dormant Company Checklist

If you believe your company is dormant, use this checklist:

• Confirm that the company has genuinely stopped trading or has never started.
• Check that it has no relevant income or activity.
• Identify the date trading stopped, if applicable.
• Check whether HMRC already recognises the company as dormant.
• Notify HMRC if necessary.
• Check whether a Company Tax Return is currently due.
• Deal with any Corporation Tax from the period before dormancy.
• Review VAT registration.
• Review PAYE registration.
• Continue filing Companies House accounts.
• Continue filing the annual confirmation statement.
• Keep appropriate company and tax records.
• Notify HMRC promptly if the company becomes active again.

Frequently Asked Questions

Does a dormant company need to tell HMRC?

If a company has stopped trading and has no other income, it can tell HMRC that it is dormant for Corporation Tax. Doing so generally means it will not need to file further Company Tax Returns unless HMRC requests one or the company becomes active again.

Does HMRC automatically know that a company is dormant?

Not necessarily. HMRC can sometimes identify and treat a company as dormant, but companies should not assume that HMRC automatically knows they have stopped trading. If appropriate, notify HMRC using its dormant-company service.

Do dormant companies pay Corporation Tax?

A genuinely dormant company generally does not have Corporation Tax to pay for the dormant period. However, it may still have Corporation Tax liabilities from a period when it was trading.

Do dormant companies need to file accounts?

Yes. A limited company generally continues to file accounts with Companies House even when dormant. Dormant companies can usually use simplified dormant accounts where eligible.

Do dormant companies need to file a confirmation statement?

Yes. Companies House requires companies, including dormant companies, to file a confirmation statement at least once every year.

Does dormant status cancel VAT?

No. VAT is separate. If a dormant company is VAT registered, it may need to deregister or continue submitting nil VAT returns depending on whether it intends to restart trading.

What happens if a dormant company starts trading again?

You must tell HMRC that the company has become active and register for Corporation Tax again. The company will then resume its relevant tax filing and payment obligations.

Can a newly incorporated company be dormant?

Yes. A company can be dormant for Corporation Tax between incorporation and the point at which it begins trading, provided its activities meet HMRC's requirements for dormancy.

Is dormant for HMRC the same as dormant for Companies House?

No. HMRC and Companies House use different definitions and rules. A company can be dormant for Corporation Tax while still having Companies House filing obligations.

Conclusion

A dormant company is not a company that can simply be forgotten. If your UK company has stopped trading, or has never started trading—you should establish whether it qualifies as dormant for Corporation Tax and make sure HMRC's records accurately reflect its position.

For many companies, notifying HMRC of dormancy means they will not have to submit further Company Tax Returns while dormant. But that does not remove Companies House obligations, and it does not automatically cancel VAT, PAYE or other tax registrations. The safest approach is to treat dormancy as a compliance status rather than a shutdown button:

Confirm dormancy → notify HMRC where necessary → deal with previous tax liabilities → review VAT and PAYE → keep filing at Companies House → notify HMRC when trading resumes.

For founders, especially those running UK companies from overseas, keeping these obligations separate and up to date can prevent unnecessary penalties and make it far easier to restart the business or close it properly, when the time comes.