Unfortunately making your limited company dormant isn’t just a matter of deciding you’re not going to use it any more.
Companies House state
A company is dormant if it has had no ‘significant accounting transactions’ during the accounting period. A significant accounting transaction is one which the company should enter in its accounting records.
When determining whether a company is dormant you can disregard the following transactions:
- payment for shares taken by subscribers to the memorandum of association;
- fees paid to the Registrar of Companies for a change of company name, the re-registration of a company and filing annual returns; and
- payment of a civil penalty for late filing of accounts.
Which means in simple terms, if you have paid anything out or been paid since the beginning of the current financial year you can’t make your company dormant until, at the earliest, the end of the this financial year . And what’s more, if you do plan to make it dormant next year, make sure there are no payments falling due in that year either e.g the corporation tax bill.