Accounting

Company formation & filings

Dormant company formation

A dormant company is one that exists on the Companies House register but has no significant accounting transactions. It is a legitimate and common arrangement: founders use it to secure a name before launch, businesses use it to protect brand variants, investors use it to have a vehicle ready for a purchase, and people who have stopped trading use it to preserve a company's name and history. The form is identical to any other private company; what makes it dormant is the absence of activity, and the price of that status is a reduced but still real filing burden every year.

from £29 · fixed + £100 Companies House fee · plus £100 Companies House fee

Next deadlines

  • Companies House identity verification for directors and PSCs, phased in from 18 November 2025
  • Confirmation statement due within 14 days of your review date, at least once every 12 months
  • Dormant company accounts (AA02) due 9 months after the accounting reference date
  • Companies House accounts due 9 months after your year end (a 31 December year end files by 30 September)

Fees

Packages, fixed and published

£29

Dormant company formation

£49

Formation + HMRC dormancy notification

£149

Formation + first-year filings (confirmation statement + dormant accounts)

The Companies House fee of £100 is charged by Companies House, shown separately on your quote and passed on at cost. It is not part of our fee.

Who this is for

Dormant Company Formation

Founders and business owners across the UK who want to reserve a company name ahead of launch, entrepreneurs holding a company for a venture starting later, existing businesses protecting a brand or variant name, property investors preparing a vehicle for a future purchase, and anyone who wants a company on the register without any trading activity yet.

What is included

Inside the fixed fee

  • Name check and incorporation with the simplest share structure, usually one £1 share
  • Registered office and director details set up so the company can sit untouched
  • HMRC notified that the company is dormant so no Corporation Tax returns are demanded
  • Guidance on what keeps a company dormant and what would end its dormant status
  • First confirmation statement and dormant accounts (AA02) in the £149 bundle
  • Reminders before each annual deadline so the company stays in good standing

In detail

How dormant company formation works

Our formation fee for a dormant company is £29 plus the Companies House incorporation fee of £100, passed on at cost. The company is set up with the simplest structure that works, usually a single £1 share, a registered office and one director, all verified under the identity rules in force since November 2025. The £49 package adds the notification to HMRC that the company is dormant, which stops HMRC demanding Corporation Tax returns; HMRC's letter with the company's Unique Taxpayer Reference arrives shortly after incorporation and the notification follows it. The £149 bundle adds the first confirmation statement and the first dormant accounts on form AA02, so that a company formed to sit quietly actually does so.

The rules on what preserves dormancy are strict and easily broken. Companies House treats a company as dormant if it has had no significant accounting transactions in the financial year, and the only permitted exceptions are the payment for shares on incorporation, Companies House fees and penalties for late filing. A bank charge, interest received or an accountant's invoice paid from the company's own money ends dormancy for that year and requires full accounts instead of the AA02. So the director or shareholder pays all fees personally, most dormant companies have no bank account at all, and the share capital is shown as paid by the director or as unpaid.

Even dormant, the company must file a confirmation statement each year with the £50 Companies House fee and dormant accounts within nine months of the year end. Missing them brings late filing penalties starting at £150 and, eventually, compulsory strike-off, which removes the company and with it the name protection it was formed to provide. Our annual dormant accounts service at £49, with the confirmation statement filed alongside for £79 plus the Companies House fee, exists to prevent this; we diarise the dates and file in good time, invoicing the director personally so that dormancy is not broken by our own fee.

When the time comes to trade, the transition is simple: tell HMRC within three months that trading has begun, open a bank account, and from that accounting period file full accounts and a Corporation Tax return. Nothing changes at Companies House. We move the company from the dormant service to our limited company accounts service and the deadlines carry on. A dormant company protects a name on the register but not as a trade mark, so a brand that matters is also worth registering with the Intellectual Property Office. Everything is handled online at fixed fees agreed in advance.

Process

From first message to filed

  1. Tell us your situation

    A short message or call about what you do and what needs filing. We ask the questions that determine the right package and nothing more.

  2. Fixed fee in writing

    You receive one price for the work, confirmed by email before anything starts. It does not change if the job takes longer than we expected.

  3. Send records, review the draft

    Records come by WhatsApp or email. We prepare the draft, explain the figures in plain English and answer your questions.

  4. We file, you get the receipts

    Once you approve and the fee is settled, we submit electronically and forward the HMRC or Companies House acknowledgement the same day.

Worth knowing

Rules that come up in this work

Switching accountants

You can switch accountant at any point in the year. The new firm requests clearance and your records from the old one, which cannot withhold your own documents though it may hold its own working papers until its fees are settled. Agent authorisations with HMRC and Companies House are transferred, and the next deadline is picked up without a gap.

Closing a company

A solvent company that has finished its purpose can be dissolved by voluntary strike-off: form DS01 with a £13 Companies House fee, after three months without trading and with all debts paid, final accounts and tax return filed, and assets distributed. HMRC objects to any application where returns or tax are outstanding, so the sequence matters more than the form.

Crypto records and reporting

Crypto tax splits into capital gains on disposals and income on rewards, with different rates and different reporting. The £3,000 annual exempt amount and the 18% and 24% rates apply to gains; staking, mining and airdrop income is taxed at marginal income tax rates. HMRC's nudge letters to holders have increased sharply, and a voluntary disclosure before one arrives is treated far more leniently.

The 60-day property CGT return

Selling UK residential property that was not your main home for the whole period of ownership triggers a separate Capital Gains Tax return, due within 60 days of completion along with payment of the tax. This is in addition to the annual Self Assessment. The gain is taxed at 18% or 24% depending on your income band, after the £3,000 annual exempt amount.

Record keeping

Good records are the difference between a quick enquiry and a long one. For the self-employed, five years after the filing deadline; for companies, six years from the year end; for VAT, six years. Photographs of receipts, PDF statements and software exports all count. The requirement is to keep records, not paper, and a well-organised cloud folder satisfies it.

Allowable expenses

Expense claims are where a return is won or lost in an enquiry. The test is wholly and exclusively for the trade; where a cost is mixed, the business proportion can be claimed if it can be identified. Capital items such as equipment and vans are relieved through capital allowances rather than as expenses, except under the cash basis where they are simply deducted when paid.

Employer National Insurance

The cost of an employee is more than the salary. Employer National Insurance at 15% above £5,000 a year, the 3% minimum pension contribution, holiday pay, equipment and management time all come on top. The Employment Allowance of £10,500 reduces the National Insurance for most employers with more than one person on the payroll.

Questions

Dormant Company Formation: your questions answered

What does it cost in total?

Our formation fee is £29 plus the Companies House incorporation fee of £100, passed on at cost, so £129 all in. Adding the HMRC dormancy notification makes it £49 plus £100. The £149 bundle includes formation, the notification, the first confirmation statement (Companies House £50 fee separate) and the first dormant accounts.

What makes a company dormant?

For Companies House, a company is dormant if it has had no significant accounting transactions during the financial year. Paying for shares on incorporation, Companies House fees and penalties do not count. Anything else, including bank charges or an accountant's fee paid from the company, ends dormancy for that year.

Does a dormant company have to file anything?

Yes. A confirmation statement every year with the £50 Companies House fee, and dormant company accounts on form AA02 within nine months of the year end. HMRC does not require Corporation Tax returns once told the company is dormant, until it starts trading. Missing the Companies House filings leads to penalties and eventual strike-off.

How do I tell HMRC the company is dormant?

After incorporation HMRC writes with the company's Unique Taxpayer Reference. You then tell HMRC, through its online service or in writing, that the company is dormant and from when. HMRC confirms no return is needed. The £49 package handles this for you and keeps the confirmation on file.

Can a dormant company have a bank account?

It can, but any transaction through it other than the share payment ends dormancy. Most dormant companies have no bank account and the share capital is shown as unpaid or paid by the director personally. If you open an account, do not let fees or interest go through it.

Who should pay the Companies House fees and your fees?

The director or shareholder personally, not the company. If the company pays from its own funds that is an accounting transaction and dormancy is lost for the year, which would require full accounts instead of the AA02. We invoice the director for exactly this reason.

How do I start trading when I am ready?

Tell HMRC the company has started trading within three months, open a bank account, and from that accounting period file full accounts and a Corporation Tax return. Nothing needs to change at Companies House. We move you from the dormant service to the limited company accounts service at that point.

Does reserving a name with a dormant company stop others using it?

It stops anyone registering an identical or "too like" company name at Companies House. It does not give trade mark protection, so a competitor could still trade under the name without incorporating it. For brand protection a trade mark application to the Intellectual Property Office is the complementary step.

Do directors still need identity verification for a dormant company?

Yes. Since November 2025 every director and person with significant control must verify their identity with Companies House regardless of whether the company trades. We guide you through verification before filing the incorporation.

What happens if I forget to file?

Companies House sends reminders and then penalties for late accounts, starting at £150, and eventually begins compulsory strike-off, which removes the company and the name protection you formed it for. Our annual service exists to prevent this; we track the dates and file in good time.

Can I make an existing company dormant instead of forming a new one?

Yes. If a company has stopped trading you can make it dormant rather than closing it, preserving the name and history. That is a different service, make a company dormant, at £44 plus the Companies House fee for the confirmation statement, and includes notifying HMRC and ceasing registrations.

What accounting reference date should a dormant company have?

It defaults to the last day of the month of incorporation one year on, which is fine for a dormant company. If you expect to start trading at a particular time, aligning the year end to the tax year or your planned trading cycle can save a short or long first period later. We discuss this at formation.

Where

A national service

Dormant Company Formation is a Companies House or HMRC filing that works identically wherever your business is based, so it has one page for the whole United Kingdom rather than a page for each town. The process, the fee and the turnaround are the same for a company in Belfast, Glasgow, Cardiff or London. England, Scotland, Wales, Northern Ireland: all covered.

Related

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