If a company has stopped trading and has no other income, then the company is usually classed as dormant for Corporation Tax purposes. 

A company is usually dormant for Corporation Tax if it:

• has stopped trading and has no other income, for example investments;
• is a new limited company that hasn’t started trading;
• is an unincorporated association or club owing less than £100 Corporation Tax; or
• is a flat management company.

There is a special online form that can be used to advise HMRC if a company is dormant. The form can be found at www.gov.uk/tell-hmrc-your-company-is-dormant-for-corporation-tax. In order to complete the form, you will need the company’s name, 10-digit Unique Taxpayer Reference (UTR) and the date the company ceased trading. It is also possible to notify HMRC by phone or by post if the online option is not available.

HMRC can also send a notification if they think a company is dormant. This notice will state that a company or association is dormant and is not required to pay Corporation Tax or file Company Tax Returns.

Limited companies are still required to file annual accounts and a confirmation statement even if the company is dormant for Corporation Tax purposes.

A company can stay dormant indefinitely, however, there are costs associated with this option. This might apply if a company is restructuring its operations or wants to retain use of a company name, brand or trademark.