Dormant company accounts
penalties guide and tax return required for a dormant company
Guide to filing dormant company accounts and submitting returns:
- Dormant company filing requirements and how to file:
- Dormant companies do still get penalties.
- A dormant company does still need to prepare accounts, file dormant accounts and file tax returns.
- You need to comply with all Companies House and HM Revenue & Customs filing requirements within normal penalty filing deadlines to avoid fines in default; you have to:
- Accounts and forms you need to fill in:
- Companies House:
- File accounts - submit dormant accounts to Companies House - penalties still apply to late filing.
- AA02 filing Complete dormant year end accounts; fill in form AA02 form:
AA02 Dormant company accounts (DCA)
- to do much simplified company dormant accounts are applicable.
- CS01 filing - submit Form CS01 (AR01) Confirmation statement return dormant company to Companies House - striking off or prosecution still apply in default.
- Normal and dormant filing fee £13 via Companies House online system; £40 on paper.
- Changes in details of People with significant control PSC. That's you if you own the company.
- 'Nil returns' - There are no such things as nil accounts or nil CS01 (AR01). Do returns with valid information; you need to fill in form CS01 and AA01 but this may be simple if the company has never traded.
- HM Revenue & Customs HMRC:
- CT600 filing - Submit dormant company tax return:
- submit dormant accounts.
- and form CT600 Corporation Tax return by Efiling online.
- HM Revenue & Customs - penalties still apply to CT600 late filing;
- see Avoid Corporation Tax penalties by filing a form CT41G below.
- CIS300 filing - submit dormant CIS300 Construction industry scheme, nil returns, - CIS penalties still apply to late filing.
- VAT100 filing - you can submit dormant VAT returns, make nil returns, with HM Revenue & Customs - VAT penalties reduced to nil when nil return filed.
- P35 filing - submit dormant P35 Annual PAYE/NI returns, nil returns, with HM Revenue & Customs - P35 penalties reduced to nil when nil P35 return filed.
Much simplified company dormant accounts apply if:
- Dormant company definition:
- No "significant accounting transactions" have taken place from the beginning to the end of the accounting period and
- No significant entries have been made through the company bank account.
- No dividends have been paid.
- No other events have taken place which would require an entry in the company accounts.
- Closing the company bank account is the simplest way to keep a company dormant.
- Do not open a company bank account until you are ready to trade.
We have a fixed tariff fee for preparing accounts corporation tax etc. for dormant companies and other nil returns. We will quote a low competitive fee for companies which are almost dormant.
A single transaction will void the dormant status
- Exempt from "transactions" in assessing dormant company status are:
- Original formation share capital.
- Three categories of payment to Companies House:
- CS01 annual return filing fee, £40.00 or £13.00 with efiling.
- Change of name filing fee £10.
- Companies House penalties.
Dormant company dividends
- Dividends can be paid from dormant companies.
- Paying dividends - A dormant company can pay a dividend but then it ceases to be dormant.
- This is more a problem of definition.
- File dormant accounts for complete years in which no dividend was paid.
- Accounts and corporation tax returns in the year of the dividend will still be fairly simple.
- Ask us for a quotation; based on our dormant update tariff of £150 + VAT.
Dormant company accounts and penalties
- Most penalties also apply to dormant companies.
- Update your dormant company £150 + VAT.
- See our tariff for a Dormant company inclusive support service to avoid penalties; including accounts, Corporation Tax return and Form CS01 (AR01) Confirmation Statement annual return and anything else you need to do with your dormant company.
- Penalties will have to be paid if the company is continuing and if unpaid will be subject to county court judgment and legal enforcement with additional legal fees.
How to avoid penalties
- Avoid penalties by striking off. If penalties already apply it may be better to have the company struck off and register a new company when you need it.
- Dormant company tax status:
- Avoid Corporation Tax penalties by filing a form: CT41G Dormant Company insert. You need to ensure that this has been accepted by HM Revenue & Customs and that they have the proper address, particularly if the registered office has changed or is with a registration agent.
- Avoid failure to notify Corporation Tax penalties when the company starts any business activity by filing form CT41g (CT41g-clubs for clubs and societies).
- Come off dormant company tax status by filing CT41g when the company starts any business activity.
- Cancel Construction industry schemes CIS; otherwise penalties will accumulate.
- Deregister for VAT to cancel VAT returns and cancel PAYE schemes to avoid having to argue penalties and assessments down to nil by filing nil returns.
- If the company is being:
- struck off or
- is going into liquidation
- penalties will not need to be paid but
- accounts still need to be prepared for Corporation Tax purposes.
- HMRC may halt the strike off process if VAT returns CT600 Corporation Tax returns and accounts are outstanding.