Is my company dormant?

I formed a company a while ago and I am now receiving letters from Companies House telling me to file the company accounts. However, I did not set the business up eventually. The only transactions were the bank charges in the company bank account. Do I still need to file accounts or is the company dormant?

1st January 2012

By definition, a dormant company will have no ‘significant accounting transactions’ during the period. There is little guidance on what is deemed to be ‘significant’, but when deciding you should consider whether such a transaction would be entered into its accounting records. You may also disregard the following specific transactions:

  • Receipts from shareholders for the payment of their shareholdings
  • Fees paid to Companies House for a change of company name, the re-registration of a company and filing annual returns; and
  • Payment of a civil penalty for late filing of accounts.

Bank charges do not meet the above definition, and therefore, the company is not dormant. It should therefore abide by the normal obligations for a small private limited company.

If you do not intend to make use of the company for some time, it may be advisable to source a business bank account that does not incur bank charges. You may then be able to take advantage of the reduced filing requirements for a dormant company.

 

By Jo Nockels

Disclaimer: The information provided is based on current guidance (at date of publication) from HMRC and may be subject to change. Any advice shared here is intended to inform rather than advise. Taxpayer's circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this information, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.

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