Setting up a dormant company from scratch is relatively straightforward. Register your company with Companies House in the usual way - for more information, read How to register a company in 5 steps.
Following company formation, HMRC needs to be informed of the dormant status. You can do this by phone or post.
Previously active companies
In order to make an existing active company dormant, all bills must be paid and contracts cancelled. Any agreements with customers should be terminated and amounts due or owing reconciled. Outstanding taxes and VAT must be paid, along with any final wages due, and the correct procedures need to be implemented regarding dismissal or redundancy of employees (including the closure of PAYE schemes). Business bank accounts should also be closed.
HMRC can then be informed that the company is dormant for corporation tax. If your company has never received notice to deliver a Company Tax Return, you can do this by phone or post. If you’ve filed a Company Tax Return or received a ‘notice to deliver a Company Tax Return’, you will need to file a Company Tax Return online. This will show HMRC that your company is dormant for this period. For more information on the process, see the government’s guidance.
Companies that are registered for VAT must de-register within 30 days of becoming dormant. If you plan to restart trading, you must send ‘nil’ (or empty) VAT returns while your company is dormant.