If your UK limited company is showing as active at Companies House even though you have never traded, this does not necessarily mean something has gone wrong. A company can be incorporated, remain registered and appear active on the Companies House register without ever making a sale, providing a service or generating revenue. In many cases, the company may simply be a newly formed business that has not started trading yet.

The important issue is understanding what “active” means, because Companies House and HM Revenue & Customs (HMRC) use the terms active, trading and dormant in different contexts. If your company has never traded, you may need to treat it as dormant for Corporation Tax purposes. But you will still have ongoing filing obligations with Companies House, including annual accounts and a confirmation statement. Here is what to check and what to do next.

What Does “Active” Mean at Companies House?

Seeing the word Active on your Companies House record generally means that the company is still registered and has not been dissolved or struck off. It does not automatically mean that the company has traded. This distinction is particularly important for founders who incorporated a company months ago but have not yet launched it. For example:

Company incorporated: 10 January
First customer: None
Sales: £0
Business bank account: Not opened
Companies House status: Active

There is nothing inherently contradictory about this. The company can remain legally registered while not carrying on business activity. Companies House also has a separate concept of a company being dormant for accounting purposes. A company is generally dormant for Companies House purposes when it has had no significant accounting transactions during the financial year. So an active company on the public register can also be dormant for Companies House accounts purposes.

Can a Company Be Active but Never Have Traded?

Yes. A newly incorporated limited company can exist for a period before it starts trading. HMRC explicitly recognises that a new limited company that has not started trading can be dormant for Corporation Tax purposes. This is common when founders:

• incorporate before launching a business;
• want to secure a company name;
• are developing a website or product;
• are waiting for funding;
• are preparing to enter the UK market;
• are setting up banking or payment arrangements;
• are waiting for licences or regulatory approvals;
• or simply have not yet found customers.

The key question is therefore not: “Does Companies House say Active?” It is: “Has the company actually started carrying on business activity or receiving income?”

What Does “Dormant” Mean?

Dormant does not necessarily mean that the company has been closed. It means that the company is not carrying on the relevant activity for the particular purpose being considered. There are two important concepts:

Dormant for Corporation Tax

HMRC generally treats a new limited company as dormant for Corporation Tax if it has not started trading or carrying on other relevant business activity.

Dormant for Companies House

Companies House considers a company dormant if it has had no significant accounting transactions during the financial year. Certain transactions are disregarded when determining Companies House dormancy, including:

• fees paid to Companies House for certain filings;
• late filing penalties;
• money paid for shares when the company was incorporated.

This distinction matters because a company can be dormant for Corporation Tax while still having some activity that needs to be considered separately for Companies House or other tax purposes.

I Never Traded — Does That Automatically Mean I Am Dormant?

Not necessarily. “Never traded” and “dormant” are related concepts, but they are not identical. HMRC's Corporation Tax guidance says a company that has not yet started trading can generally be dormant for Corporation Tax purposes. However, HMRC's definition of activity extends beyond simply making sales. For Corporation Tax purposes, activity can include:

• carrying on a trade or profession;
• buying and selling goods for profit;
• providing services;
• earning interest;
• managing investments;
• receiving other income.

This means you should not decide that a company is dormant merely because it has generated £0 in sales.

Example

Imagine you incorporated a company but never sold anything. However, the company:

• opened an interest-bearing bank account;
• received £500 interest;
• bought investments;
• or began providing services for customers without yet being paid.

The company may have activity that affects its tax status. This is why “I have never made a sale” is not always enough to establish dormancy.

What About Pre-Trading Activities?

There is an important exception for genuine preparation before trading. HMRC recognises that a company can undertake certain pre-trading activities without necessarily being treated as having started trading. Examples include:

• preparing a business plan;
• negotiating contracts;
• researching the market;
• incurring certain preliminary expenditure while deciding whether to start the business.

HMRC specifically states that preliminary activities and expenditure connected with setting up a business can occur before the company becomes active for Corporation Tax purposes. So if you incorporated your company, spent time developing your business plan and have not yet begun actual business activity, you may still be dormant for Corporation Tax.

The exact treatment of expenses can be more complicated, particularly where the company has started incurring substantial business costs, so accounting advice can be useful if the distinction is unclear.

What Should I Do If My Company Never Traded?

If your company genuinely has not started trading and has no other relevant income or business activity, the practical process is usually straightforward.

Step 1: Confirm the Company's Actual Activity

Start by reviewing everything the company has done since incorporation. Ask:

• Have we sold anything?
• Have we provided services?
• Have we issued invoices?
• Have we received business income?
• Has the company earned interest?
• Has the company made investments?
• Has it purchased and sold goods?
• Has it employed anyone?
• Has it registered for VAT?
• Has it operated PAYE?
• Has it incurred transactions that go beyond preliminary setup?

This review is more important than the company's Companies House status.

Step 2: Check Your HMRC Position

If the company has not started trading, it may be dormant for Corporation Tax. HMRC provides an online service specifically for telling HMRC that a company is dormant for Corporation Tax. You generally need the company's name and 10-digit UTR to use the service.

If you have already received a notice to deliver a Company Tax Return, do not simply ignore it because the company never traded. HMRC says that if you have not informed it that the company is dormant, you may still be required to submit a Company Tax Return, and failing to do so can result in penalties.

Step 3: Keep Filing With Companies House

This is one of the most important points for new founders: Dormant does not mean you can stop filing with Companies House. All limited companies must continue to meet their Companies House filing obligations. Companies House states that all limited companies must deliver annual accounts, including dormant companies.

You must also file a confirmation statement at least once every 12 months. Companies House explicitly states that every company, including dormant and non-trading companies, must file a confirmation statement each year. So you cannot simply incorporate a company and leave it untouched indefinitely.

What Accounts Does a Never-Traded Company File?

If the company qualifies as dormant for Companies House purposes, it may be able to file dormant company accounts. Companies House allows dormant companies that meet the relevant conditions to file simplified dormant accounts.

For a company that has been dormant since incorporation, this can make annual reporting considerably simpler than preparing full trading accounts. However, directors remain responsible for ensuring that the accounts are accurate and filed on time.

Important distinction

A company can be: Dormant for Companies House and Dormant for Corporation Tax at the same time. But the two tests are not identical. Do not assume that filing dormant accounts at Companies House automatically tells HMRC that the company is dormant for Corporation Tax.

What If I Already Registered for Corporation Tax?

This is a common situation. A founder may have registered the company for Corporation Tax during incorporation but then never started trading. That does not necessarily mean the company has to remain treated as an active trading business indefinitely.

If the company has not started trading and otherwise qualifies as dormant, you can tell HMRC that it is dormant for Corporation Tax. Once HMRC has been informed, you generally do not have to file another Company Tax Return unless:

• HMRC asks you to;
• the company starts trading again.

However, if HMRC has already issued a notice to deliver a Company Tax Return, you should deal with that notice rather than assuming dormancy automatically cancels the filing obligation.

What If I Have Already Filed a Tax Return?

Do not try to erase the company's tax history simply because it never traded. If a Company Tax Return has already been filed, the correct treatment depends on what was submitted and for which accounting period. You may need to establish:

• whether the company was dormant during the period;
• whether a return was correctly filed;
• whether HMRC issued a notice to deliver;
• whether any income or expenses were reported;
• whether amendments are necessary.

Where previous filings contain errors, an accountant or tax adviser can help determine whether an amendment or other action is required.

What If the Company Had Expenses but No Sales?

This is where the situation becomes more nuanced. A company might have:

• paid for a website;
• bought software;
• paid an accountant;
• purchased advertising;
• paid professional fees;
• paid for equipment;
• opened a bank account and incurred charges.

Having no sales does not automatically mean the company is dormant for every purpose. The nature and timing of the expenses matter. HMRC distinguishes between preliminary expenditure incurred while deciding whether to start a business and activity associated with an actual business.

Companies House also uses its own test for dormancy based on significant accounting transactions. Therefore, if your company has incurred several expenses, do not simply label it dormant because revenue is zero.

What If I Paid the Company Formation Fee?

The cost of incorporating the company does not automatically prevent it from being dormant for Companies House purposes. Companies House specifically disregards certain transactions when determining whether a company is dormant, including money paid for shares when the company was incorporated and certain Companies House fees.

This is particularly relevant to founders who have incorporated a company but have not yet launched it. The fact that you paid the incorporation fee does not, by itself, mean that the company has started trading.

What If the Company Is VAT Registered?

VAT creates another layer of compliance. If your company is VAT registered but is not trading, do not simply assume that VAT obligations disappear. HMRC's dormant-company guidance states that if a company is VAT registered and does not intend to trade again, it should deregister for VAT within 30 days of becoming dormant.

If the company plans to restart trading, it must submit nil VAT returns while dormant. This is a good example of why dormancy should be reviewed across the company's entire tax and compliance position.

What If the Company Has Employees or PAYE?

If the company has employees or operates a PAYE scheme, you should review that position separately. HMRC states that if a dormant company does not plan to restart trading during the tax year, it should close its PAYE scheme. Do not leave an unnecessary PAYE scheme active simply because the company remains registered.

Should I Keep the Company or Close It?

There is no requirement to close a company simply because it has never traded. A limited company can remain dormant for as long as the legal and filing requirements continue to be met. GOV.UK confirms that you can keep a limited company dormant rather than closing it. Whether keeping it is sensible depends on your circumstances.

Keeping the company may make sense if:

• you intend to launch the business later;
• you want to preserve the company name;
• you expect to start trading soon;
• you already have contracts or plans tied to the company;
• maintaining the company is less disruptive than closing and incorporating again.

Closing it may make sense if:

• you have abandoned the business;
• you no longer need the company name;
• you do not expect to trade through it;
• you want to stop ongoing compliance responsibilities.

If you want to close a company that has never traded, you may be able to apply for voluntary strike-off if the statutory conditions are satisfied. But do not use strike-off simply to avoid filing overdue accounts or dealing with tax liabilities. The company must meet the relevant conditions before applying.

What Happens When You Eventually Start Trading?

A dormant company can be restarted. When the company begins trading or otherwise becomes active for Corporation Tax, you need to tell HMRC. GOV.UK states that when a dormant company restarts trading, you should register for Corporation Tax again through your business tax account. You will then have Corporation Tax reporting obligations for the relevant trading period. Your Companies House reporting cycle continues separately. For example:

1 January 2026: Company incorporated
January–September 2026: No trading
1 October 2026: Business begins trading

The company may have been dormant for Corporation Tax before 1 October. Once trading begins, the Corporation Tax position changes. The important thing is to record the actual date the business activity began and notify HMRC appropriately.

A Practical Dormant Company Checklist

If your company is active on Companies House but has never traded, work through this checklist:

Companies House

• Check that the company is still registered.
• Confirm the registered office.
• Check the directors and PSC information.
• Check the confirmation statement deadline.
• Check the annual accounts deadline.
• Determine whether dormant accounts are appropriate.

HMRC

• Confirm whether the company is dormant for Corporation Tax.
• Check whether HMRC has issued a notice to deliver a Company Tax Return.
• Check whether the company has a UTR.
• Tell HMRC if the company is dormant where appropriate.

Other taxes

• Check VAT registration.
• Check PAYE registration.
• Check whether the company has received interest or other income.
• Check whether there are other tax registrations or obligations.

Company records

• Keep accounting records.
• Keep statutory registers up to date.
• Keep incorporation documents.
• Keep records of transactions and expenses.
• Monitor when trading actually begins.

Common Mistakes Founders Make

“Companies House says Active, so I must be trading.”

Not necessarily. Active on the Companies House register generally means the company remains registered. It does not establish that the company has generated revenue or started trading.

“I have no sales, so I can ignore HMRC.”

No. The company's tax position depends on more than sales. If HMRC has issued a notice to deliver a tax return, you need to address it.

“Dormant means I do not need to file anything.”

Incorrect. Dormant companies still have Companies House obligations, including annual accounts and confirmation statements.

“I can just leave the company inactive indefinitely.”

You can keep a company dormant, but you still need to maintain its compliance obligations. Failing to file required documents can lead to penalties and potentially strike-off action.

“I should close the company because I never traded.”

Not necessarily. If you still intend to use the company, keeping it dormant may be a perfectly legitimate option.

FAQs

Is my company trading if Companies House says “Active”?

No. “Active” on the Companies House register does not necessarily mean the company has started trading. A company can remain registered and active while being dormant for accounting or Corporation Tax purposes.

I incorporated my company but never made a sale. Do I need to do anything?

Yes. You should review the company's Corporation Tax position and continue meeting Companies House filing obligations. A company that has never started trading may qualify as dormant for Corporation Tax purposes.

Do dormant companies have to file annual accounts?

Yes. All limited companies must deliver annual accounts to Companies House, including dormant companies.

Do dormant companies have to file a confirmation statement?

Yes. Every company, including dormant and non-trading companies, must file a confirmation statement at least once every year.

Does paying the company formation fee mean my company is no longer dormant?

Not necessarily. Companies House specifically disregards certain incorporation-related transactions when determining whether a company is dormant, including money paid for shares on incorporation and certain Companies House fees.

I registered for Corporation Tax but never traded. What should I do?

If the company qualifies as dormant for Corporation Tax, you can tell HMRC that it is dormant. If HMRC has already issued a notice to deliver a Company Tax Return, check whether a return is still required for the relevant period.

Can I keep my company dormant for several years?

Yes. A limited company does not have to be dissolved simply because it is not trading. You must continue meeting its Companies House obligations while it remains registered.

What happens when my dormant company starts trading?

You need to tell HMRC that the company has restarted trading and register for Corporation Tax as appropriate. You will then have tax-return and payment obligations for the relevant trading period.

Can I close a company that never traded?

Potentially, yes. If the company meets the conditions for voluntary strike-off, you may be able to apply to have it removed from the Companies House register. If you still plan to use the company, however, keeping it dormant may be more appropriate.

Conclusion

If your UK company is showing as Active at Companies House but has never traded, there is usually no reason to panic. The word “active” on the Companies House register does not necessarily mean that your business has started trading. A newly incorporated company can remain registered while being dormant for Corporation Tax and, where it has no significant accounting transactions, dormant for Companies House purposes.

The crucial step is to separate the company's registration status from its actual business activity and tax status. If the company genuinely has not started trading, review its position with HMRC, notify HMRC of dormancy where appropriate, and continue filing the required annual accounts and confirmation statement with Companies House. If the company is VAT registered, has PAYE obligations, receives income or has other activity, review those obligations separately.

When you eventually start trading, tell HMRC promptly and move the company into the appropriate active tax regime. For founders and global entrepreneurs, this distinction is particularly useful when incorporating a UK company before launching a business. IncorpUK, a UK company formation and management platform for global founders, can form part of the broader company administration process, but the company's actual tax and accounting position should always be determined from its activities and applicable HMRC rules rather than simply from the “Active” label on Companies House.