How to Make a Company Dormant in the UK

How to Make a Company Dormant in the UK

Deciding to make a company dormant can be a strategic move for many business owners in the UK. Whether you are pausing operations temporarily or winding down the business, understanding the process and requirements is crucial. This guide will walk you through the steps on how to make a company dormant in the UK, ensuring you meet all legal and financial obligations.

What Does It Mean to Make a Company Dormant?

A dormant company is one that has ceased all trading activities and has no significant accounting transactions during its financial year. Making a company dormant can be beneficial for several reasons, including preserving the company name, restructuring, or preparing for future activity without the need for immediate trading.

Steps to Make a Company Dormant

  1. Confirm Your Decision

Before proceeding, ensure that making your company dormant is the best decision. Consider consulting with certified accountants to evaluate the financial and legal implications.

  1. Notify HMRC

You must inform HMRC of your intention to make the company dormant. This can be done by writing to your local Corporation Tax office. Include the company’s name, registration number, and the date it will become dormant. Ensure all tax liabilities are settled, and no VAT returns are due.

  1. Update Your Company Records

Update your company records to reflect the dormant status. This includes ceasing all business activities, stopping income and expenses, and ensuring no significant accounting transactions occur.

  1. File Dormant Company Accounts with Companies House

As a dormant company, you still need to file annual accounts and a confirmation statement with Companies House. However, these accounts are simplified. Use form AA02, designed for dormant companies, to report minimal financial activity.

Legal Obligations of a Dormant Company

Annual Accounts

Even when dormant, your company must file annual accounts. These will include a balance sheet signed by a director. The accounts must confirm that the company has not engaged in any trading activities.

Confirmation Statement

A confirmation statement must be submitted annually to ensure Companies House has up-to-date information about your company. This statement includes details about the company’s registered office, directors, and share capital.

Financial Considerations

  1. Banking

Keep a minimum balance in your business bank account to cover any potential fees. Avoid any transactions that could disrupt the dormant status.

  1. Business Rates and Insurance

You may still be liable for certain business rates and insurance. Consult with accountants in London or other areas to manage these obligations efficiently.

Benefits of Making a Company Dormant

Cost Savings

Maintaining a dormant company is less expensive than keeping an active one. You can save on administrative and operational costs.

Name Preservation

By keeping your company registered as dormant, you retain the company name, preventing others from using it.

Future Preparedness

A dormant company can be reactivated at any time, making it easier to resume trading when needed.


Making a company dormant in the UK involves several important steps and considerations. By following the proper procedures, you can ensure compliance with HMRC and Companies House requirements. Consulting with certified accountants and utilizing resources like online training can further streamline the process. Whether you are pausing operations temporarily or restructuring your business, understanding how to make a company dormant in the UK is essential for strategic planning.

For more detailed information and assistance, consider consulting professionals such as accountants in London, accountants in Romford, or other local experts. Additionally, exploring practical accounting training can provide valuable insights into managing a dormant company effectively.

For further details on making a company dormant in the UK, you can visit SKZEE.


What are the costs involved in making a company dormant?

While the immediate costs are minimal, you should account for filing fees for annual returns and professional fees for accountants.

How long can a company remain dormant?

There is no time limit for how long a company can remain dormant. However, it must comply with filing annual accounts and confirmation statements.

Can a dormant company still have employees?

A dormant company cannot have employees, as paying wages would constitute a significant accounting transaction.

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