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Is this company dormant in the eyes of HMRC

Is this company dormant in the eyes of HMRC

If an international company just set up a company in the UK but is actively trying to generate business by contacting UK customers and has not exceed in generating any business for the entire year. They have no employees in the UK

Would that be construed as trading for Corporation Tax Purposes or would it be considered as dormant.  It is not clear from the HMRC website

https://www.gov.uk/guidance/corporation-tax-trading-and-non-trading

The only costs the company pays is for the office address and my fees for filing the accounts.

Furthermore if dormant the losses (due to office address and accountancy fees) cannot be carried forward but can they be carried forward once the company starts trading ?

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By Jdopus
19th Feb 2016 15:03

I believe your company would be classified as dormant as it is pre-trading.  Provided you declare this to HMRC you don't need to file a CT return.

 

http://www.hmrc.gov.uk/manuals/bimmanual/bim46351.htm

 

The expenses of the office address and your fees fall under pre-trading expenditure as described in the link above and so can be claimed as expenses within the first year of trade.

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By sash100
19th Feb 2016 16:47

Pre-trading

Jdopus wrote:

I believe your company would be classified as dormant as it is pre-trading.  Provided you declare this to HMRC you don't need to file a CT return.

 

http://www.hmrc.gov.uk/manuals/bimmanual/bim46351.htm

 

The expenses of the office address and your fees fall under pre-trading expenditure as described in the link above and so can be claimed as expenses within the first year of trade.

If the company continues to be under pre-trading in the second or third year can it then carry forward these losses in future under Pre- Trading expenditure.  To be honest, I am not sure if the company is actually actively trying to sell in the UK or just enjoy having a UK company on their website.  Could I still submit a Corporation Tax Return anyway with these losses since it will not take much time ?

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19th Feb 2016 15:33

Dormant

Only Companies House are interested in whether the company is dormant.

HMRC are interested in whether the company is trading.  It may not be trading but not dormant either.

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19th Feb 2016 17:12

Yes

Personally, I would.  

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