A dormant company is legally registered but not actively trading. Many entrepreneurs form companies to protect a name, hold assets, or prepare for future trading. But even dormant companies have filing obligations. This guide explains everything you need to know about maintaining a dormant UK company in 2026.
Key Point
Dormant doesn't mean "no obligations." You must still file annual accounts and a confirmation statement with Companies House—failure to do so can result in penalties and strike-off.
What is a Dormant Company?
A dormant company is a UK company that:
- Is legally registered with Companies House
- Has no "significant accounting transactions"
- Is not actively trading or carrying on business
Why Keep a Company Dormant?
- Protect a company name – Reserve the name for future use
- Hold assets – Property, intellectual property, investments
- Prepare for future trading – Set up the structure before launching
- Simplify wind-down – Easier than immediate dissolution
- Maintain credit history – Company age can affect business credit
Companies House vs HMRC: Different Definitions
Companies House and HMRC define "dormant" differently:
| Authority | Definition of Dormant |
|---|---|
| Companies House | No "significant accounting transactions" during the financial year |
| HMRC | Not carrying on business or receiving any income |
Key Difference
A company can be dormant for Companies House purposes but active for HMRC purposes (or vice versa). For example, a company earning bank interest is dormant for Companies House but active for HMRC.
Transactions That Don't Break Dormant Status (Companies House)
- Filing fees paid to Companies House
- Late filing penalties
- Money paid for shares when the company was incorporated
Filing Requirements for Dormant Companies
1. Annual Accounts
Dormant companies must file annual accounts with Companies House:
- Form: DCA (Dormant Company Accounts) or AA02 for micro-entities
- Deadline: 9 months after financial year-end
- Contents: Simple balance sheet and statement that company is dormant
- Cost: Free to file online
Late Filing Penalties
| How Late | Penalty |
|---|---|
| Up to 1 month | £150 |
| 1-3 months | £375 |
| 3-6 months | £750 |
| Over 6 months | £1,500 |
Penalties double if accounts are filed late in two consecutive years.
2. Confirmation Statement
All companies (including dormant ones) must file a confirmation statement:
- Frequency: At least once every 12 months
- Deadline: Within 14 days of your confirmation date
- Contents: Confirms company details are correct (directors, address, etc.)
- Cost: £50 online (from February 2026)
3. HMRC Notification
You must tell HMRC your company is dormant:
- Write to HMRC or use the online service
- Once notified, you won't need to file Company Tax Returns
- If HMRC sends a notice to file, you must respond
4. Registered Office Address
- Must maintain a UK registered office address
- Can use a virtual office service
- Official mail must be received and handled
5. Identity Verification (New for 2026)
- Under ECCTA, directors must still verify their identity
- Required even for dormant companies
- Must provide Companies House personal code on confirmation statement
What Breaks Dormant Status
The following activities will make your company "active" and break dormant status:
Significant Accounting Transactions
- Settling any invoice (paying or receiving)
- Paying or receiving bank interest
- Paying bank charges (even small ones)
- Paying employees or directors
- Paying dividends to shareholders
- Buying or selling anything
- Receiving rental income
- Any trading activity
Common Mistake
Bank charges and bank interest break dormant status. If your business bank account earns interest or incurs fees, your company is no longer dormant for Companies House purposes. Consider a non-interest-bearing account or closing the account.
What You Can Do While Dormant
- Pay Companies House filing fees
- Pay late filing penalties
- Maintain registered office
- Appoint or remove directors
- Issue shares (initial shares only)
- Hold company meetings
Costs of Maintaining a Dormant Company (2026)
Mandatory Costs
| Item | Annual Cost |
|---|---|
| Confirmation statement | £50 |
| Dormant accounts filing | Free |
| Total mandatory | £50/year |
Optional But Recommended
| Service | Typical Cost |
|---|---|
| Virtual registered office | £30-100/year |
| Company secretary service | £50-150/year |
| Filing service (accounts + CS) | £50-100/year |
Total Cost
You can maintain a dormant company for as little as £50/year (just the confirmation statement fee) if you use your own address and file yourself. With a basic service package: £100-200/year.
How Long Can You Stay Dormant?
Indefinitely. There's no time limit on how long a UK company can remain dormant, as long as you:
- Continue to file annual accounts on time
- File confirmation statements on time
- Maintain a registered office
- Keep company records up to date
- Comply with any new requirements (e.g., identity verification)
When Companies House Might Strike Off
Companies House can initiate strike-off proceedings if:
- You fail to file annual accounts
- You fail to file confirmation statements
- They have reasonable cause to believe the company is not carrying on business
You'll receive warning letters before strike-off. If you're maintaining your dormant company properly, this shouldn't happen.
Reactivating a Dormant Company
When you're ready to start trading:
-
Notify HMRC
Tell HMRC your company is now active. You'll start filing Corporation Tax returns.
-
Set up proper accounting
You'll need to keep full accounting records and file full accounts (not dormant accounts).
-
Consider VAT registration
Register for VAT if your turnover will exceed £90,000 or if voluntary registration makes sense.
-
Open a business bank account
If you closed the account while dormant, open a new one.
-
Update insurance
Get appropriate business insurance for your activities.
First Active Year
Your first "active" accounting period may be different from your financial year. Consult an accountant to ensure you file correctly for the transition period.
Key Takeaways
- Dormant companies still have filing obligations—accounts and confirmation statement
- Companies House and HMRC define "dormant" differently
- Bank charges and interest break dormant status
- Minimum cost: £50/year (confirmation statement fee)
- No time limit on how long you can stay dormant
- Late filing penalties range from £150-1,500
- Under ECCTA, directors must still verify their identity
Need a Registered Office for Your Dormant Company?
Our partner 1st Formations offers affordable virtual registered office addresses, perfect for maintaining dormant companies. Keep your home address private and ensure you receive official correspondence.
Dormant Company Accounts Service →