Tax return and dormant company

Psyche Registered Posts: 187 Dedicated contributor 🦉
Hi there,
I have a client whose limited company traded for a year and then went dormant.
I understand that if the company is dormant, it does not have to file a CT return. But if it did have some expenses during the course of the year -- my fee, for instance ;) as well as capital allowances -- could it possibly benefit him to file a tax return for the year which gives a loss, and then carry that loss forward or possibly back?
If not, could he "hold" these expenses and claim them during his next active accounting period, and carry the TWDV of his assets forward until the next year he files?
Thanks for the help


  • Anne Boleyn
    Anne Boleyn Registered Posts: 196 Dedicated contributor 🦉
    Dormant company

    As far as I am aware if there has been any movement in the company then it is not dormant. You do also have to file something for dormant companies just not prepare accounts.
  • SarahS
    SarahS Registered Posts: 60 Regular contributor ⭐
    Anne is correct - the company can't be dormant if it's incurring trading expenses.
  • Psyche
    Psyche Registered Posts: 187 Dedicated contributor 🦉
    Okay, thanks for your replies but you're not actually answering my question. It's not to do with Companies House, it's to do with tax.

    Leaving my fee out of it (I understand that directors of dormant companies pay accountants, rather than the company itself) what do I do, tax wise, about the capital allowances the company could be getting if it were not dormant? Can they be carried forward until the company begins trading again? Likewise the depreciation? These are not "transactions" but they do affect the accounts, including the balance sheet which is required for submission (to Companies House) by a dormant company. The income statement of which would be something like:

    Turnover 0
    Depreciation X
    Net loss (X)

    But as this is not required, presumably the assets are not depreciated for the year(s) the company is dormant? Do they retain their NBV (and TWDV) until resumption of trading?

  • SarahS
    SarahS Registered Posts: 60 Regular contributor ⭐
    Did you manage to get an answer to this Psyche?
  • deanshepherd
    deanshepherd Registered Posts: 1,809 Beyond epic contributor 🧙‍♂️
    If a company has ceased trading the losses die with the trade. You cannot recommence trade at a later point and bring those old losses forward.

    Accountancy fees relating to the trade should be anticipated (i.e. accrued) in the final set of trading accounts. It does not matter if they are not physically paid until after trading has ceased.
Privacy Policy