Reactivating a dormant company

If a dormant or non-trading company begins trading again it is important that HMRC be notified. This can be done using HMRC Online Services, where companies can submit the necessary information.

When a company ceases trading, it is generally classified as dormant. While a company can remain dormant indefinitely, doing so comes with ongoing costs and filing obligations, such as submitting annual accounts to Companies House. However, restarting a dormant company is usually more cost-effective and administratively simpler than incorporating a new one.

To resume trading, a company must take the following steps:

• Notify HMRC that the company has restarted trading by re-registering for Corporation Tax.
• File the company’s accounts with Companies House within 9 months of the end of its financial year.
• Pay any Corporation Tax due within 9 months and 1 day of the end of the company’s accounting period.
• Submit a Company Tax Return, including full statutory accounts, to HMRC within 12 months of the company’s year-end.

Whilst the deadlines for submitting annual returns and accounts typically remain the same, the Corporation Tax accounting period may differ. It is based on the date the company resumes trading, which may result in a new accounting period for tax purposes.

Our friendly Business and Tax Advisory experts are here to support you every step of the step of the way. Give them a call on 01380 723692 or email us here.