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dormant company or not?

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A limited company stops trading but it still has only bank charges, accountancy fees. Is this company dormant? According to the Companies House definition, it is not unless it only pays Companies House fees and penalties.

However, by looking at the HMRC definition, a company is not active if it stops trading. Even though this company has clearly stopped trading, will it be exempt from Corporation tax?

thank you.

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By DJKL
10th May 2022 14:47

A company is only in the charge to CT if what it does gives rise to any such charge.

If the company ceased trading then a CT600 needs done for the AP to that date (cessation of trade).

If the company has any income and gains arising post this date it will likely require to pay CT re same and submit a CT 600 re same, if not then no CT payable and if HMRC informed no CT600 likely due.

I

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By SteveHa
10th May 2022 15:25

What Companies House call "dormant" and what HMRC generally means by the term are not the same thing.

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Replying to SteveHa:
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By David Ex
10th May 2022 16:52

SteveHa wrote:

What Companies House call "dormant" and what HMRC generally means by the term are not the same thing.

Even I knew that from the number of times it’s asked on here!

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Replying to SteveHa:
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By Hugo Fair
10th May 2022 17:24

It would of course be better if they each used different terminology.

CH tend to regard any 'sign of life' as meaning the company is alive (the opposite of their definition of dormant); whilst
HMRC are only really interested in whether any activities mean there is a chance of tax being (or becoming) due.

Overly simplistic (and the actual rules are clearer) - but a concept that seems to escape many.

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Replying to SteveHa:
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By thevaliant
11th May 2022 08:24

Hence whilst I tend to use the terms 'Dormant' and 'Non trading', the first for Companies House purposes and the second for HMRC.

Fun fact, you can be dormant and have P&L transactions!

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Replying to thevaliant:
By JCresswellTax
11th May 2022 10:19

This is exactly how I approach it.

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