Baskadia

1. What is a Dormant Company?

A dormant company is one that has no significant accounting transactions during the financial year.
“A significant accounting transaction” excludes transactions like:

• Payment for shares on incorporation
  

• Fees to Companies House for name changes
  

If you plan to keep your company dormant—perhaps for future use or to preserve a name—you must still:

• File annual accounts with Companies House (dormant accounts suffice)
  

• Submit a confirmation statement (CS01)
  

• File a Corporation Tax return if HMRC requires one (typically not needed if truly dormant)
  

2. What is an Active Company?

An active company is one that’s trading, holding assets, hiring staff, or undertaking any business activity.

An active company must comply with full administrative duties:

• Prepare and file full statutory accounts and CT600
  

• Register for and report VAT if turnover exceeds the threshold
  

• Operate PAYE if employing staff or paying directors
  

• Directors must file Self Assessment tax returns
  

And, of course, both company types must submit a confirmation statement (CS01) annually.

✅ Quick Comparison

Aspect Dormant Company Active Company

Trading activity None Yes Statutory accounts Dormant accounts Full statutory accounts Corporation Tax return Usually not required Mandatory (CT600)VAT registration Not needed Required if turnover exceeds threshold PAYE obligations Not needed Required if salary or staff are involved Confirmation Statement Required Required Costs & complexity Minimal Higher (accounts, tax, payroll software)

➡️ Don’t Forget to File the Confirmation Statement

Whether your company is dormant or active, don’t overlook the annual confirmation statement (CS01). It keeps your public record up to date, avoiding potential penalties or even strike-off.

➡️ File confirmation statement today to ensure compliance and maintain good standing.

3. When to Switch Between States

If your dormant company begins trading, category changes, and you must:

• File full statutory accounts next year
  

• Possibly register for VAT and PAYE
  

• Notify HMRC and Companies House of changes to business activity
  

Conversely, an active company can be made dormant if it ceases activity and has no outstanding filings or obligations.

📌 Final Summary

• Dormant companies: Simple, minimal filings, no trading
  

• Active companies: Full accounting, tax, and payroll obligations
  

• Both must file a confirmation statement annually
  

➡️ Keep your company records accurate and legal—file confirmation statement now to stay compliant!