Dormant Company Corporation Tax: Do You Need to File a CT600?
You set up a limited company but haven't traded yet. Or you stopped trading last year and the company is sitting idle. Either way, HMRC still knows it exists — and you're wondering whether you need to file a CT600.
The short answer: it depends on HMRC's definition of "dormant," which is different from Companies House's definition. This catches a lot of directors out.
Here's exactly what you need to know.
"Dormant" Means Different Things to Different Bodies
This is the single biggest source of confusion. Companies House and HMRC use the word "dormant" differently:
Companies House definition
A company is dormant if it has had no significant accounting transactions during the period. The only allowed transactions are:
- Shares issued on incorporation
- Filing fees paid to Companies House
- Late filing penalties
If your company meets this test, you can file dormant accounts (AA02) with Companies House — a simplified balance sheet with no profit & loss account.
HMRC definition
HMRC considers a company dormant for Corporation Tax purposes if it:
- Is not carrying on business (no trading activity, no income)
- Has no other income (no bank interest, no rental income, no investment gains)
- Has no chargeable gains
- Is not liable to pay Corporation Tax
The critical difference: a company can be dormant for Companies House but active for HMRC. For example, if your non-trading company earns £15 of bank interest, it's still dormant at Companies House but technically active for HMRC.
When You DON'T Need to File a CT600
HMRC may tell your company it doesn't need to file CT600 returns. This happens when:
- You told HMRC the company is dormant — and they agreed to make it dormant for Corporation Tax
- The company has never traded since incorporation
- HMRC has issued a "notice to deliver" exemption — they've confirmed in writing that no CT600 is required
How to tell HMRC your company is dormant
If your company has never traded or has stopped trading, you need to notify HMRC:
- New company that has never traded: Write to HMRC (or call the Corporation Tax helpline on 0300 200 3410) and tell them the company has not started trading. They'll mark it as dormant and won't issue notices to deliver a CT600.
- Company that has stopped trading: Write to HMRC to tell them the company is now dormant. Include the date trading ceased and confirm there's no other income.
Once HMRC agrees, they'll stop expecting CT600 returns. You won't receive a "notice to deliver" for future periods.
Important: Even if HMRC considers you dormant, you must still file confirmation statements and dormant accounts with Companies House annually. These are separate obligations.
When You MUST File a CT600
You must file a CT600 if:
1. HMRC has issued a "notice to deliver"
If HMRC has sent you a notice requiring a CT600, you must file one — even if the company is dormant. Ignoring the notice triggers an automatic £100 penalty after 1 day, rising to £200 after 3 months, then 10% of the tax due after 6 and 12 months. See our full guide to CT600 deadlines and penalties for more detail.
2. The company earned any income
Even tiny amounts count:
- Bank interest (even £5 in a business account)
- Rental income from company-owned property
- Investment returns or dividend income
- A one-off sale of a company asset
Any of these means the company isn't dormant for HMRC, and a CT600 is due.
3. The company had a chargeable gain
If the company sold an asset (property, shares, equipment) at a profit, corporation tax is due on the gain — and a CT600 must be filed.
4. You haven't told HMRC the company is dormant
If you simply stopped trading without telling HMRC, they'll continue expecting CT600 returns. No filing = penalties.
5. The first accounting period
Many directors incorporate a company and don't trade immediately. HMRC will register the company for Corporation Tax automatically (usually within a few weeks of incorporation via the Companies House/HMRC data share). If you don't tell them it's dormant, they'll expect a CT600 for the first accounting period.
How to File a CT600 for a Dormant Company
If you do need to file — either because HMRC issued a notice or because you want to be safe — filing a dormant company CT600 is straightforward. It's essentially a nil return.
What goes on the return
| CT600 Box | Entry | Notes |
|---|---|---|
| Box 1 (Turnover) | £0 | No trading income |
| Box 3 (Trading profits) | £0 | No profit |
| Box 21 (Total profits) | £0 | Nothing chargeable |
| Box 145 (Tax payable) | £0 | No tax due |
| Box 155 (Tax outstanding) | £0 | Nothing to pay |
| Box 430 (Turnover from trade) | £0 | No trade |
| Box 435 (Trading profit/loss) | £0 | Nil |
Every income and profit box is zero. You're telling HMRC: "The company existed during this period, but nothing happened."
Accounts still required
Even a nil CT600 must be accompanied by statutory accounts in iXBRL format. For a dormant micro-entity, this is a simple balance sheet showing:
- Share capital: £1 (or whatever was issued)
- Cash at bank: the bank balance at year-end (if any)
- Net assets: equal to share capital plus any retained cash
No profit & loss account is needed for micro-entity dormant accounts.
Filing with Taxpipe
Taxpipe handles dormant company returns. Enter zeros for income and expenses, confirm the balance sheet figures, and we generate the iXBRL accounts and CT600 for HMRC submission. It takes about 10 minutes and costs £59.
The Dormant Company Lifecycle
Here's what typically happens and what you need to do at each stage:
Stage 1: Company incorporated, not yet trading
- Companies House notifies HMRC automatically
- HMRC registers the company for Corporation Tax
- Action: Contact HMRC to confirm the company is dormant
- Result: No CT600 required until you start trading
Stage 2: Company starts trading
- Action: Register for Corporation Tax within 3 months of starting to trade (via HMRC online)
- HMRC will issue notices to deliver CT600 returns
- File CT600 for each accounting period
Stage 3: Company stops trading
- Action: Notify HMRC the company is now dormant
- Include the date trading ceased
- File a final CT600 covering the period up to cessation
- HMRC marks the company as dormant — no more CT600s required
Stage 4: Company struck off or dissolved
- Apply to Companies House to strike off the company (DS01 form)
- Before applying: File all outstanding CT600 returns and pay any tax due
- HMRC must be notified — they can object to striking off if returns are outstanding
Penalties for Not Filing
Even for a dormant company with no tax to pay, missing a CT600 when HMRC expects one triggers penalties:
| Time After Deadline | Penalty |
|---|---|
| 1 day late | £100 |
| 3 months late | Another £100 |
| 6 months late | 10% of unpaid tax (minimum £100 if no tax due is debatable — HMRC may still apply fixed penalties) |
| 12 months late | Another 10% of unpaid tax |
You can also be charged daily penalties of £10/day for returns more than 6 months late (up to 90 days — £900 maximum).
The irony: A dormant company with £0 tax owing can still rack up £200+ in penalties for late filing. It's cheaper to file a nil return on time.
Can You Appeal Dormant Company Penalties?
Yes. If HMRC penalised you for not filing a CT600 for a genuinely dormant company, you can appeal on the grounds of reasonable excuse. Common arguments:
- You believed the company was exempt from filing (and had reason to believe this)
- You never received a notice to deliver
- You had told HMRC the company was dormant but they didn't update their records
Appeals can be made online through your Government Gateway account or by writing to HMRC. Include evidence — copies of letters you sent, phone call records, etc.
Should You Just Close the Company?
If you're not planning to trade again, consider striking off the company rather than leaving it dormant:
Pros of striking off
- No more annual filings (Companies House or HMRC)
- No risk of penalties for missed returns
- Clean break
Cons of striking off
- Costs nothing if you do it yourself (DS01 form) but takes 3+ months
- Company assets transfer to the Crown (make sure the bank account is empty)
- If you change your mind, restoring a company costs £100+
- Must file all outstanding returns before applying
Alternative: Keep it dormant
If there's any chance you'll trade again, keeping the company dormant is simpler than dissolving and re-incorporating. Just make sure HMRC knows it's dormant.
Frequently Asked Questions
Does a dormant company need to pay corporation tax?
No. If the company has no income, profits, or chargeable gains, there's no corporation tax to pay. But you may still need to file a nil CT600 — tax due and filing obligation are separate things.
How long can a company stay dormant?
Indefinitely. There's no time limit. Companies House requires annual confirmation statements and dormant accounts regardless of how long the company has been inactive.
Will HMRC automatically know my company is dormant?
No. You must tell them. HMRC and Companies House share data, but HMRC won't automatically stop expecting CT600 returns just because you filed dormant accounts at Companies House.
Can I file a dormant CT600 online?
Yes. Filing software like Taxpipe can submit a nil CT600 with dormant accounts directly to HMRC. For a comparison of filing options and costs, see our guide to the cheapest ways to file a CT600. You can also use HMRC's own online service if you have Government Gateway access.
What if my dormant company earned bank interest?
Then it's not dormant for HMRC purposes. You must file a CT600 reporting the interest as income and pay corporation tax on it. Even £10 of interest means the company is active for Corporation Tax.
Need to file a CT600 for your dormant company? Use Taxpipe — enter zeros, confirm your balance sheet, and we file with HMRC in minutes. Just £59, no accountant needed.