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How Do I Inform HMRC That My Company Is Now Dormant?

Companies House technically does not require you to notify them about the change of status of your company until your next filing of your annual accounts, but you should notify HMRC as soon as possible to avoid any complications and/or penalties, which you do by contacting the local Corporation Tax office. They will respond to your email within 15 days, verifying your company's dormant status. You do not need to contact HMRC again until you declare the company active again.


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If your company was actively trading before you declared it inactive, you must file HMRC's Company Tax Refund and pay the applicable Corporation Tax for the active period. HMRC will mark your firm as dormant in their records until it resumes trading activity. HMRC's official website contains all required submissions, filings, and contact information.


Is It Expensive to Put a Company on Hold?

Once the HMRC has certified your company's registration as dormant in their records, you will be obliged to meet certain financial responsibilities in order to keep its inactive status. Aside from the costs, you'll also need to file an annual confirmation statement every year to prevent others from registering your company name (as they may assume it's available because no one is legally using it), as well as updated information about the company's current situation and the people in charge. You can download and complete the Companies House form online at HMRC's website for a cost of £13. The date for filing the company's confirmation statement is easy to recall because it is the date of incorporation of your company.


Another need is to submit inactive company accounts, which are also free of charge on HMRC's website. However, only the filing process for dormant firms is free of charge; there are further expenses if the accounts are not filed on time, and HMRC may fine you for penalties. Non-compliance, for any reason, can result in higher fines, and if such non-compliances result in a significant violation, Companies House may be required to strike your company from the register.


How Do I Get Money From My Dormant Business?

You can take money out of your dormant firm for a variety of reasons, including paying out dividends to shareholders. However, this action will activate a section in the Corporations House rules respecting dormant companies, reactivating the inactive company immediately. The ideal path for you to take without changing your dormant company accounts status will involve the following:

  • Contributing to the company's pension plan on behalf of the board of directors.

  • Repaying any outstanding loan obligations owed to company members.

  • The ultimate dividend amount is distributed to stockholders.


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How Do I Relaunch My Dormant Business?

The process of reactivating your company from dormancy to active is the same as when you applied for dormancy at HMRC; your company's board of directors must notify them in writing, just as they did previously. Make sure you submit your application for reactivation of your firm at least three months before it begins trading or receiving income again. There are three fundamental steps to accomplishing this.

Your company's board of directors must notify HMRC of your intention to restart operations by registering for Corporation Tax within three months of receiving notification. You will also be expected to pay all outstanding corporation tax bills within 9 months and 1 day of your firm's accounting reference date (consult with HMRC for further assistance).

  • All company accounts must be submitted to Companies House within 9 months of your firm's accounting reference date.

  • The final duty is to file your company's tax return with HMRC within 12 months of its accounting reference date.

  • The majority of the paperwork will be with HMRC because Companies House does not require a dormant firm to notify them that it will begin trading. They'll find out if it does when the corporation files its next set of annual statutory accounts.

  • You might also be interested in: How to Check Your Company's Credit Score in the UK and Ensure It's Optimal.

Can I form a company and then do nothing with it?

That is feasible. If your company is not yet ready to trade, you can register it as dormant and leave it that way; however, you must submit annual dormant company accounts as well as a confirmation statement to Companies House in order to keep it dormant and prevent any unwelcome penalty fees. Once your company is ready to begin trading, you just need to notify HMRC and follow the steps indicated above so that they can record your start date and begin preparing your tax papers for each fiscal year.

How Long Can I Keep My Business Idle?

Companies House does not impose any deadlines or time limits for keeping your company dormant. They will not worry you as long as you meet your requirements of submitting your annual reports and annual accounts return to them on time each year. Companies House appears to have a very lax rule about dormant companies, and they make the criteria as simple as possible to provide corporations that wish their status as dormant no hassles.

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