Even if your company is not currently trading, it is your responsibility to inform and file your dormant accounts with Companies House. Whether you are protecting a brand name or holding assets for the future, your company may transition into dormant status.
However, a dormant company is still visible to the authorities and has legal obligations to report to Companies House. The question is, do you know how to file dormant company accounts?
This guide simplifies the filing of a dormant company’s accounts requirements to ensure your company remain compliant and avoids penalties.
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How to Know If Your Company is Dormant?
Before learning how to file dormant company accounts, you must check your company’s status. According to Companies House, a company is dormant if it has no significant accounting transactions during the financial year.Significant Transactions
Examples of significant accounting transactions include:- Paying bank charges or earning interest
- Paying directors’ salaries and dividends
- Buying or selling products and services
What Does Not Count as a Significant Transaction?
The following are not considered significant transactions:- Money paid for shares when the company was incorporated
- Late filing fines paid to Companies House
- Fees paid to Companies House for filing a confirmation statement
How to File Accounts for a Dormant Company
Every year, a company is required to submit its dormant accounts to Companies House. For a limited company, filing a confirmation statement and annual accounts with Companies House is mandatory. You must file these documents even if your company is dormant for Corporation Tax or classified as dormant by Companies House. However, if you are a small company and your company is dormant according to Companies House, you do not have to include an auditor’s report with your accounts. Small dormant companies can file unaudited dormant accounts.How to File Dormant Company Accounts: Step-By-Step Instructions
Use the Companies House online platform to file your dormant accounts with ease. Follow these instructions to file your dormant accounts:Verify Status
Before starting the filing process, check if you match the conditions for being classified as dormant.Gather the Required Information
You need the following information to file dormant company accounts:- Company name and address
- Company authentication code
- Company registration number
Use the Online Service
Use the Companies House’s online WebFiling system to submit your dormant accounts.Use Form AA02
This form is for dormant companies that have never traded. Prepare your dormant accounts, use this form and submit it to Companies House by post. Remember, the AA02 form is for filing paper documents.Director’s Approval
The company’s accounts must be signed by a director and approved by the board of directors.Meet the Deadline
File your dormant accounts within 9 months of your financial year-end. If you miss the filing deadline, you may have to pay penalties. You may have to pay a £150 penalty for up to 1 month late, £375 for 1 to 3 months late, £750 for 3 to 6 months late filing, and £1,500 if more than 6 months late.Do I Need to File Dormant Accounts With HMRC?
Another frequently asked question by business owners after “how to file dormant company accounts” is whether they need to file dormant accounts with HMRC. Dormant accounts are filed with Companies House, not HMRC. However, the paperwork and requirements are different. Every year, you must file your annual accounts and confirmation statement with Companies House, whereas Corporation Tax returns (CT600) are submitted to HMRC only if requested.Dealing with HMRC and Corporation Tax
HMRC treats dormant companies differently from Companies House. Notify HMRC that your company is dormant for Corporation Tax purposes. If you have never traded, HMRC will mark your company as dormant. Once HMRC marks you as dormant, you don’t need to file a Company Tax Return (CT600) with them until you start trading. But if HMRC sends you a notification to file a tax return, you must contact them to confirm the dormancy status again. Moreover, if you stop trading, you must inform HMRC because you may be required to send one final tax return covering the period up until you become dormant.How Do I Notify HMRC of Dormant Accounts?
To notify HMRC that your company is dormant for Corporation Tax, you should visit the official website of HMRC and fill out the HMRC online form. Notifying HMRC of dormant accounts is separate from filing obligations with Companies House.What are the Rules for Dormant Accounts?
Knowing the rules for dormant accounts is equally important as knowing how to file dormant company accounts. The key rules for dormant accounts are:- If you file your accounts late for two consecutive financial years, the penalty is automatically doubled.
- As soon as you miss the deadline, penalties are applied automatically. Companies House does not waive the penalties just because your company is dormant. Penalties are enforced automatically.
- If you are a public company, you may have to pay a higher penalty, starting at £750 and rising to £7,500, if delayed for 6 months.
- If you continuously miss filing deadlines, the Registrar may assume your company is dormant and may initiate compulsory strike-off (dissolve the company).
Common Mistakes to Avoid
Filing dormant accounts is a little effort, but even a minor error can lead to compliance issues and unnecessary fines. Common mistakes when learning how to file dormant company accounts are:- Missing filing deadlines
- Filing incorrect accounts
- Forgetting to file the confirmation statement (CS01)
How Much Do Accountants Charge to File Dormant Accounts?
In the UK, an accountant's fee for filing dormant accounts ranges from £49 to £200. The fee depends on the experience and level of services you need. High-volume online filing services usually charge lower fees, while full-service accountants may charge more. If you need assistance with filing dormant accounts and other accounting services, contact our experts. At MicroEntityAccounts, we help you ensure legal compliance, manage specialised tax regulations and simplify complicated tax affairs effortlessly.Let’s Discuss Your Needs
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