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dormant for CTR purposes?

dormant for CTR purposes?

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company's only transactions in year were accountancy fees in relation to share capital and accounts preparation - is the company dormant for CTR purposes as no trade yet commenced?

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By Paul Crowley
19th Nov 2021 21:57

Dormant is not useful in this context
Dormant is for Companies house
Corporation tax is about trading
Company has not traded or received income so clearly not started trading
But you will need to provide accounts to HMRC to get the return done away with. That could take some time as it requires a letter and a human to read it and do the correct thing
In the mean time the company will probably get 2 late filing penalties

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Replying to Matrix:
RLI
By lionofludesch
21st Nov 2021 07:33

Sadly, yes, HMRC has started using "dormant" instead of "not trading" for inactivity for Corporation Tax. Confusing, because it means something completely different from the Companies House definition.

Certainly you need to tell HMRC tgat the company isn't trading. Might be by letter but, if returns have already been issued and you can't get them withdrawn, you night need to submit them.

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By nick farrow
22nd Nov 2021 10:45

thanks PC, Matrix & Lion - it is now clear to me that the company has not commenced trading but that the dormant accounts filed at CoHo will need amending to reflect various transactions relating to share capital i.e. not DCA for coho but still not trading for CTR

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Replying to nick farrow:
RLI
By lionofludesch
22nd Nov 2021 11:34

nick farrow wrote:

thanks PC, Matrix & Lion - it is now clear to me that the company has not commenced trading but that the dormant accounts filed at CoHo will need amending to reflect various transactions relating to share capital i.e. not DCA for coho but still not trading for CTR

Share Capital ?

Check whether they are excluded transactions, in which case, the company can still be dormant.

To be fair, I still don't understand why dormancy is so important to folk. FRS 105 accounts show bu99er all extra detail anyway. Just do FRS 105 and play safe.

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