Under the Companies Act 2006, UK limited companies are required to produce and file annual accounts with Companies House. A common misconception is that if a company is dormant it does not have any filing requirements; however this is not the case. Those unsure of the requirements for dormant companies could benefit from using an accounting service.
Some of the basic requirements for dormant companies are:
Although all companies must file accounts with Companies House dormant companies are often able to complete either DCA accounts or dormant accounts. These are simplified versions of the full accounts that must be completed by active companies. Under section 480 of the Companies Act 2006 a dormant company does not have to arrange for its accounts to be audited if it has either been dormant since formation or since the end of the previous financial year, subject to certain exemptions.
Corporation Tax Return
Most limited companies must complete a corporation tax return. Dormant companies are not normally required to complete a corporation tax return as they do not have any significant transactions. However, it is often recommended to inform HM Revenue & Customs (HMRC) that the company is dormant to ensure that they do not expect a tax return to be filed.
All companies must complete a Companies House annual return. This is a separate document to the annual accounts that are also filed with Companies House and is instead a snapshot of information about the company at a certain date. Key information included within the annual return relates to the details of the company’s officers, share capital and its registered office address.
Company Secretarial Matters
Dormant companies are still subject to requirements laid out within the Companies Act 2006, such as those relating to keeping a company register, appointing company officers and transferring shares. It is therefore essential that any changes made to the company are updated with Companies House where this is required under the Companies Act and that a director or company secretary keeps a company register. Where a director does not have sufficient time or knowledge to complete this it may be useful to have this included within the company’s accounting service.
Failure to keep up to date with dormant company requirements can in some cases result in penalties or the dissolution of the company by Companies House. Wisteria can provide an accounting service for dormant companies that includes completion of the dormant accounts, informing HMRC of the company’s dormant status and completing the company’s annual return, making sure that your dormant company remains compliant. If you require assistance with the accounts of your dormant company please contact us on 020 8952 0140 or at [email protected]