Step 1 — Wind down the trading
Before the company can be dormant, everything must be settled: collect what you’re owed, pay every supplier and any final salary, and make sure no direct debits or standing orders will fire. From the moment you want dormancy to start, the company must have no significant accounting transactions at all.
Step 2 — Tell HMRC it's dormant for Corporation Tax
Notify HMRC that the company has stopped trading and is dormant. HMRC will normally confirm it won’t require Company Tax Returns while dormancy lasts. If a return has already been issued for a period when you were still trading, file that one to close it off cleanly.
Step 3 — Close VAT and PAYE if you had them
- VAT: deregister if you were VAT-registered (you can re-register when you restart)
- PAYE: submit a final payroll and close the scheme so HMRC stops expecting submissions
- Bank account: ideally leave nothing moving through it — even interest or charges break dormancy
Step 4 — Keep filing (yes, still)
A dormant company is not a closed company. Every year it must still file dormant accounts (9 months after year end) and a confirmation statement (with the £34 fee). Skip them and the same penalties apply as for a trading company — £150 rising to £1,500 — and eventually compulsory strike-off.
Dormant, or close it for good?
If you genuinely won’t use the company again, dissolving it (a one-off DS01) is cheaper than paying to keep it dormant year after year. Keep it dormant to protect a name, brand or clean history you’ll come back to.
Let us make it dormant for you
We handle the HMRC notification, any VAT/PAYE closures and the annual dormant filings (dormant accounts £80 + VAT) so the company sits quietly and compliantly until you need it. Call 0114 327 1480.