Keeping a company dormant preserves it, its name and its assets, but it still has to file a confirmation statement (£50 a year online) and annual accounts every year, on the normal deadlines and with the normal late filing penalties. Striking it off costs £13 online and ends those filings, but the company ceases to exist, anything it still owns passes to the Crown, its name becomes free for others to register and bringing it back needs a court order. Dormancy suits a company you expect to use again; strike off suits one you are sure you will not need.
Tax investigation insurance from £108.75 a year (£9.06 a month).Pays up to £100,000 of your accountant's fees if HMRC opens an enquiry. No excess. Buy online in a few minutes.
What is the real difference between dormant and struck off?
A dormant company still exists. It is a legal person on the register, it keeps its registration number, name, bank account and any assets, and its directors keep their duties. It is simply not doing anything. Section 1169 of the Companies Act 2006 defines a company as dormant during any period in which it has no significant accounting transaction, meaning any transaction that must be entered in its accounting records, ignoring only subscriber share payments, certain Companies House fees and late filing penalties.
A struck off company no longer exists. Under section 1003(5) it is dissolved when the second Gazette notice is published. Section 1012 makes any property it still held bona vacantia, belonging to the Crown. Section 1003(6) keeps alive the liability of every director and member, as if the company had not been dissolved.
What does a dormant company still have to file?
GOV.UK is clear that a limited company must file its confirmation statement and annual accounts with Companies House even if it is dormant. In practice that means:
- A confirmation statement every year. Section 853A requires one within 14 days after the end of each 12 month review period. The fee is £50 online or by software, or £110 on paper. See confirmation statements explained.
- Annual accounts. A company that is dormant for Companies House and qualifies as small can file simplified dormant accounts and, under section 480, is usually exempt from audit. See dormant company accounts for what they contain.
- Identity verification. Section 167M prohibits an individual from acting as a director unless their identity is verified, and that applies to a dormant company’s directors as much as anyone’s. See Companies House identity verification.
The tax side is lighter. Once you have told HMRC the company is dormant, GOV.UK says you do not need to pay Corporation Tax or file further Company Tax Returns unless you receive a notice to deliver one. If the company is registered for VAT and will not trade again, it must deregister within 30 days of becoming dormant; if it plans to restart, it must keep filing nil VAT returns. A PAYE scheme should be closed if the company will not restart in the current tax year.
Worried about an HMRC check? Tax investigation insurance pays your accountant’s fees if HMRC opens an enquiry or compliance check. Solar Protect cover pays up to £100,000 with no excess. It never pays tax, interest or penalties.
From £108.75 a year (£9.06 a month) for individuals, £117.57 for sole traders and £207.50 for companies and partnerships, including IPT and the £20 admin fee.
See my price in 2 questions or call 01795 841 310.
★★★★★ Rated 4.9 out of 5 on Trustpilot from over 160 reviews
What does keeping a company dormant actually cost?
The fixed cost is the confirmation statement fee, at £50 a year online. Companies House’s fees list sets no fee for filing a UK company’s accounts, but someone has to prepare and file them, and an accountant may charge for both. A director without a suitable address may also pay for a registered office service.
The bigger risk is penalties. Late filing penalties apply to dormant companies like any other: for a private company, £150 if accounts are up to one month late, rising to £375, £750 and then £1,500 for more than six months, and doubled if accounts are late in two successive years. Companies House lists “your company is dormant” among appeal grounds that are unlikely to succeed. Separately, if the registrar has reasonable cause to believe a company is not carrying on business or in operation, it can begin a compulsory strike off, and Companies House advises replying promptly to its letters and delivering any outstanding documents.
What does striking off involve and cost?
A company can apply on form DS01 once it has not traded, changed its name or sold trading stock for three months (section 1004) and is not in an insolvency process (section 1005). The fee is £13 online or £18 on paper. A majority of the directors must sign, copies must go to members, creditors, employees and others within 7 days, and the registrar cannot strike the company off until at least two months after the Gazette notice. Full detail is in striking off a company with DS01.
Before applying, GOV.UK says final statutory accounts and a Company Tax Return must go to HMRC, but final accounts do not have to be filed with Companies House. Bank accounts should be closed and assets dealt with, because anything left, including later refunds from HMRC, passes to the Crown. Business records should be kept for 7 years after strike off. The tax treatment of money taken out is covered in closing a limited company: tax.
What happens to the company name?
This is often the deciding factor. While a dormant company remains on the register, section 66 stops another company being registered with the same name, so the name stays reserved for you.
Once a company is struck off, that protection lapses. Section 1033 assumes the name may have been taken: if a restored company could not be registered under its former name without breaching section 66, it must be restored under another name or under its registered number, and in the latter case it must change its name within 14 days. Anyone thinking of closing a company with a valuable or distinctive name should weigh that before applying. The wider rules are in company name rules.
What if you need the company again?
A dormant company can simply restart. Companies House does not need to be told, as the next non dormant accounts will show it. HMRC does: section 55 of the Finance Act 2004 requires written notice of the start of an accounting period that does not follow on from a previous one, no later than three months after it begins.
A voluntarily struck off company is much harder to revive. Administrative restoration under section 1024 is only for companies struck off by the registrar, so a company struck off on its own DS01 application can only be restored by court order under section 1029. Section 1030 sets a six year limit from dissolution except for personal injury claims. If you change your mind before dissolution, you can withdraw the application on DS02 instead.
How do the two options compare?
| Point | Keep dormant | Strike off |
|---|---|---|
| Company exists | Yes | No, dissolved on second Gazette notice |
| Annual Companies House filings | Confirmation statement and accounts | None after dissolution |
| Fees | £50 a year confirmation statement online | £13 online once |
| Name | Protected by section 66 | Free for others to register |
| Assets left in company | Stay with company | Pass to the Crown |
| Reuse later | Restart and tell HMRC within 3 months | Court restoration only |
How might this work in practice?
Illustration only. Sam owns two companies. One was set up to bid for a contract that never came, has never traded, and has a generic name. Sam has no plans for it, so empties its bank account, waits until it has done nothing for three months and files DS01 for £13. The other ran a business that has paused while Sam works abroad for two years, and its name is known to customers. Sam keeps that one dormant, pays £50 a year for the confirmation statement, files dormant accounts on time and tells HMRC when trading resumes. Over two years dormancy costs £100 in fees plus accounting time, which buys a protected name and a company ready to use.
Common mistakes include leaving money in a bank account that pays interest, which is an accounting transaction that breaks dormancy for Companies House and is listed in GOV.UK’s Corporation Tax dormancy guidance as a form of trading; striking off a company that is still owed money; and assuming a dormant company can ignore its filing deadlines.
Company directors can protect the business against the cost of an HMRC check with tax investigation insurance, which pays up to £100,000 of accountant’s fees with Solar Protect. Read how our cover works or get a quote.
Related Accountapedia entries
- What happens if a confirmation statement is late
- Restoring a struck off company
- Bona vacantia: assets of a dissolved company
- Buying a ready made shelf company
- Objecting to a company being struck off
- Do you still file accounts after applying to strike off
- Strike out applications at the tax tribunal
Sources
- legislation.gov.uk: Act 2006 c. 46, section 1169
- legislation.gov.uk: Act 2006 c. 46, section 1003
- legislation.gov.uk: Act 2006 c. 46, section 1012
- GOV.UK: Dormant for companies house
- legislation.gov.uk: Act 2006 c. 46, section 853A
- GOV.UK: Companies house fees
- legislation.gov.uk: Act 2006 c. 46, section 480
- legislation.gov.uk: Act 2006 c. 46, section 167M
- GOV.UK: Dormant for corporation tax
- GOV.UK: Late filing penalties
Reviewed by Christine Anderson, Broker, Solar Protect. Last reviewed 19 October 2026. Part of Accountapedia, the Solar Protect guide to UK tax and accounting. This page is general information, not personalised advice.