CORPORATION TAX RETURN

When you set up a new limited company, there will normally be some time that the company is dormant – in other words; where no trading happens. HMRC takes a practical approach to this and doesn’t expect you to send a Corporation Tax Return until the company becomes active. The same applies when the company has stopped activity.

The problem, of course, is that HMRC doesn’t know that your company is dormant. They may assume that you are operating from the time you register your company with Companies House.

If they are not aware that your company is dormant, they will expect a return; the fine for not submitting can be up to £1,000. If you don’t receive a return, it doesn’t mean that HMRC knows your company is dormant. If you don’t tell HMRC and don’t submit a form, they will fine you.