Do Dormant Companies Need to File Tax Returns with HMRC?

If your company hasn’t traded during the year, you might assume there’s nothing to report to HMRC. But the rules on Corporation Tax Returns for dormant companies are not always straightforward. Let’s clear up the confusion.

What HMRC considers a dormant company

First of all, you need to establish whether your company was dormant according to HMRC. A company is treated as dormant for corporation tax purposes when it has stopped trading and has no income. This means:

• No buying or selling

• No running a business

• No bank interest or investment income

• No other taxable activity

If the company was once active in the past, HMRC will expect you to tell them when it becomes dormant - read more about this below.

When do you need to file a Corporation Tax Return?

Once you've established that your company was dormant, you are right in assuming a corporation tax return is not required to be filed. However, you still need to check if HMRC expects you to file one because it is very likely that they won't know your company is dormant (especially if it traded in the past). So, the key point is whether HMRC has sent you a 'Notice to Deliver a Company Tax Return' (form CT600):

✅ If you receive a notice – HMRC expects you to file a tax return and according to them must file one, even if your company was dormant and has nothing to declare. This means that HMRC does not know your company was dormant. You can either complete the return showing no activity or avert this altogether if you notify your dormant status to HMRC before the filing deadline - the simplest way to do this is by telling HMRC that your company is dormant.

❌ If you haven’t received a notice – you don’t need to file a return. But you must have told HMRC that the company is dormant, otherwise they may still expect one.

Informing HMRC about dormancy

To avoid unnecessary tax returns and notices, you should let HMRC know when your company becomes dormant. This can be done by:

• Telling HMRC that your company is dormant online through this link

• Calling the Corporation Tax helpline

Once they’ve updated their records, HMRC will generally stop sending notices to file a return until the company is active again.

What about corporation tax?

If your company is dormant, there’s no corporation tax to pay. However, if the company traded in a previous year, you may still need to settle tax owed for that earlier period before dormancy applies.

Key takeaways

• A dormant company does not need to file a corporation tax return.

• But if HMRC issues a notice it means they do know your company is dormant, so you can either file a nil return or tell them your company is dormant.

• Penalties can apply if a notice is ignored and you haven't told HMRC your company is dormant, even when there’s no activity to report.

At Just Dormant Accounts our simple online software caters for dormant accounts to Companies House. We do not cover corporation tax returns to HMRC for dormant companies, but if your company is dormant, you really shouldn't need it!