How to Set Up a Dormant UK Company
Companies House · SIC 99999 · HMRC · Dormant Accounts
Set Up A Dormant UK Company, Reserve Your Name, And Stay Compliant
A plain-English guide to forming a dormant UK limited company, using SIC code 99999, notifying HMRC, filing dormant accounts, and avoiding the mistakes that accidentally create trading activity.
Quick Answer
A dormant UK company is a real private limited company that has been formed at Companies House but is not carrying on significant accounting transactions. You register it the normal way, commonly use SIC code 99999 for a dormant company, then tell HMRC it is dormant for Corporation Tax if it will not trade.
Dormancy does not remove your yearly admin. You still need to keep company records, file a confirmation statement, file dormant accounts, maintain the registered office and PSC details, and pay any relevant Companies House fees. It works best for founders who want to reserve a name, prepare a future business, or hold a company inactive without opening business activity too early.
Table of Contents
- Short answer
- What “dormant” really means
- Why people set up dormant companies
- Myths vs reality
- Key facts and statistics
- Formation routes compared
- Packages for dormant setups
- Step-by-step setup with screenshots
- SIC code 99999 deep dive
- Notify HMRC of dormancy
- How to keep dormant status
- Dormant accounts and confirmation statements
- Bank setup: Payoneer or Wise
- Starting to trade later
- True cost of a dormant company
- Common mistakes
- FAQ
- Sources
Short answer
How to Set Up a Dormant UK Company in Plain English
If you need a limited company but do not want it to start trading yet, the practical answer to how to set up a dormant UK company is: incorporate a normal private limited company, report the dormant activity code where appropriate, then tell HMRC the company is dormant for Corporation Tax. The same path also answers how to register a dormant UK company, because dormancy is not a separate legal entity type at Companies House — it is a status of activity after (or from) incorporation.
In other words, you do not “form a special dormant entity.” You form a UK Ltd, often with SIC code 99999 (Dormant Company), receive a Certificate of Incorporation, notify HMRC so it does not assume you are trading, and then avoid significant accounting transactions while still filing yearly dormant accounts and a confirmation statement.
Online incorporation through a formation agent is usually the easiest path for first-time founders. Direct Companies House filing is cheaper on the official fee alone but more DIY. For the full active-company walkthrough (same screens, different intent), see how to form a UK limited company with 1stfromation. Non-residents should also read how to form a UK limited company as a non-resident.
Recommended 5-step path
- Choose and check an available company name.
- Select a package designed for name reservation / dormancy or a lean package plus address services you actually need.
- Complete formation details and enter SIC 99999 if the company will be dormant.
- After incorporation, notify HMRC of Corporation Tax dormancy (commonly within 3 months), including your UTR when available.
- File dormant accounts and confirmation statements on time, and do not trade until you are ready to reclassify as active.
Definitions that matter
What “Dormant” Really Means (Companies House vs HMRC)
People use “dormant” casually. UK law and tax practice are more precise. Two related but not identical ideas sit side by side:
| Lens | Core idea | What it mainly affects | What it does not do |
|---|---|---|---|
| Companies House / Companies Act | No significant accounting transactions in the financial year | Eligibility for simplified dormant company accounts | Does not cancel confirmation statements, officer duties, or the public register |
| HMRC Corporation Tax | Not carrying on a trade/business; no income or chargeable gains in the period (in practical HMRC terms) | Whether HMRC expects active CT returns and tax payments | Does not remove all HMRC contact forever; notices must still be handled |
| Everyday language “non-trading” | Not selling goods/services yet | Founder intent and branding | Not a legal filing category by itself; bank interest or fees can still matter |
Under the Companies Act concept used for dormant accounts, a company is generally dormant for a period if it has had no significant accounting transactions. Certain items are commonly treated as permitted without destroying dormancy — for example payment of the Companies House confirmation statement fee, payment of a late filing penalty, or the allotment of shares to subscribers on formation. Trading, paying operating expenses, receiving trading income, or most commercial bank movements can end dormancy for that period.
Important nuance
Selecting SIC 99999 tells the world the company is intended or reported as dormant. It does not create dormancy by magic. If the company trades, earns income, or records significant transactions, it is not dormant for that period no matter what the SIC code says. Always align filings with reality.
Dormant is also different from “struck off,” “dissolved,” “shell,” or “anonymous.” A UK Ltd still appears on the public register with directors, PSCs, and a registered office. If privacy or alternative structures are your real goal, compare options carefully — including non-UK routes discussed in guides like how to start an anonymous LLC and best LLC formation services for non-US residents — while understanding that no reputable structure erases all disclosure or compliance.
Use cases
Why People Set Up a Dormant UK Company
Common legitimate reasons include:
- Reserving a company name so another person cannot easily take the exact Ltd name while you prepare to launch.
- Holding a ready vehicle for a project that is delayed, paused, or waiting on funding, licences, or co-founder agreements.
- Group structuring plans where a company is formed now and activated later (with professional advice for tax and substance).
- Brand protection mindset — securing the corporate name that matches a future brand (note: this is not the same as a registered trademark).
- Learning the formation process before trading, though you should not form companies lightly just for practice.
When dormancy is the wrong tool
Do not use a “dormant” company to hide active trading, avoid taxes on real income, or park activity that already generates revenue. Misrepresenting dormancy can lead to penalties, incorrect filings, bank problems, and director risk. If you are already trading as a sole trader and want a Ltd, form the company and transition properly with accounting support rather than pretending the company is inactive.
Clear the fog
Dormant Company Myths vs Reality
Myth
“A dormant company does not need to file anything with Companies House.”
Reality
You still file accounts (often dormant accounts) and a confirmation statement, and you must report changes to officers, addresses, capital, and PSCs.
Myth
“If I pick SIC 99999, HMRC automatically knows I am dormant.”
Reality
You should still notify HMRC for Corporation Tax dormancy. Otherwise HMRC may expect returns and can penalise missed obligations.
Myth
“Dormant means free forever.”
Reality
Confirmation statement fees, address renewals, software, and professional help still cost money. Late filings create penalties and strike-off risk.
Myth
“I can take client payments ‘quietly’ and stay dormant.”
Reality
Receiving trading income generally ends dormancy. Tell HMRC you have started trading and file as an active company.
Data snapshot
Key Facts About Dormant UK Companies
These figures combine statutory concepts, common filing practice, and practical timelines. Treat fees as snapshots — Companies House and formation agents update prices.
Dormant SIC
99999
Standard Industrial Classification code for a dormant company.
HMRC window
~3 mo
Common guidance: notify Corporation Tax dormancy within about three months of formation.
CH e-filing speed
3–6h
Many electronic incorporations process the same working day once checks pass.
CS fee (online snapshot)
£34
Typical online confirmation statement fee — still due for dormant companies. Verify live fee.
Chart 1: Illustrative Annual Cost Stack for a Dormant UK Ltd
Editorial model of recurring costs. Actual amounts depend on package renewals, whether you DIY filings, and whether you keep paid address services. Not a quote.
Chart 2: Founder Attention — Setup Year vs Maintenance Years
Year 0 is front-loaded with formation, HMRC notice, and document storage. Later years are lighter if truly dormant, but filing discipline still matters.
Chart 3: What Breaks Dormancy Most Often (Editorial Risk Model)
Based on common practical failure modes, not official statistics. Use it as a risk checklist.
Choose your path
How to Register a Dormant UK Company: Routes Compared
There is no secret “dormant-only” registrar. You register a company, then keep it dormant.
| Route | Strengths | Trade-offs | Best for |
|---|---|---|---|
| Formation agent (e.g. 1st Formations) | Guided flow; packages for name reservation; optional dormant accounts help; HMRC letter templates; address services | Higher cost than bare official fee; renewals and upsells | First-timers, non-residents, founders who want packaging |
| Companies House direct | Lowest official incorporation fee path; full control | More complex DIY; limited extras; you own every mistake | Experienced filers with their own address and compliance plan |
| Accountant-led | Tax dormancy advice bundled with formation | Usually more expensive | Anyone with group structures, prior trading, or tax complexity |
If you might need an LLP instead of a Ltd, compare how to form a UK LLP as a non-resident. LLPs have different ownership and tax profiles; “dormant LLP” planning should not be copied blindly from Ltd guidance.
What to buy
Packages Designed for Dormant Companies (and What to Skip)
Some formation agents offer a package aimed at companies that start with the intention of staying dormant — sometimes branded around reserving a company name. A strong dormant-oriented package may include:
- UK registered office and director service address
- Electronic incorporation documents
- Statutory registers with first entries completed
- Confirmation statement support
- Dormant company accounts services
- A pro forma letter template to notify HMRC of dormant status
- Ongoing support channels while the company exists
That bundle is convenient if you want maintenance help. It is not mandatory. You can form lean and DIY the HMRC letter and dormant accounts if you understand the rules.
Upsells to question for a truly dormant company
- VAT registration help — usually unnecessary if there is no taxable supply activity
- PAYE registration — unnecessary with no employees or payroll
- Heavy banking partner opt-ins — only useful if you will actually open and carefully manage an account
- Printed kits — optional preference, not a dormancy requirement
Step-by-step walkthrough
How to Set Up a Dormant UK Company: Full Screen Guide
The formation flow for a dormant company is the standard limited company process, with dormancy-specific choices at SIC selection and after incorporation at HMRC. Below is a screen-oriented walkthrough you can follow while forming the company online.
Before you start
Have name options, director/shareholder identity details, address strategy, and a decision on whether one person will hold all roles. If you are non-UK based, sort registered office and mail forwarding first — see the non-resident UK Ltd guide.
1Choose and search your company name
Even a dormant company needs a unique name ending in Limited or Ltd. You cannot register without one. Use the name search tool, avoid sensitive or offensive words, and keep backups if the first choice is taken or too similar to an existing company.
2Confirm the name is available
If the tool confirms availability, proceed. Availability is not trademark clearance or domain ownership. If brand protection is critical, consider trademark advice separately from company formation.
3Select a package suited to dormancy
Prefer a package that matches inactive intent: registered office, service address, digital documents, and ideally dormant accounts or HMRC notification support. Do not buy trading extras you will not use while dormant.
4Checkout and optional extras
You may see same-day service, pre-submission review, or printed documents. Pre-submission review can reduce simple errors. Same-day helps only when identity checks and data are already clean. For dormant setups, keep the basket lean.
5Create an account and pay
Pay securely and create login credentials for the online company manager. After payment you typically receive confirmation, invoice, and access to complete company particulars.
6Enter company particulars — and set SIC code 99999
This is the dormancy-critical screen. Confirm the legal name includes Ltd or Limited, then choose SIC codes. Companies that will be dormant can select SIC code 99999 — the dedicated code reporting publicly that the company shall be dormant.
On many forms, locate it by selecting “All” categories and scrolling to the bottom of the list. You may add other codes later when trading begins. For a pure dormant reservation, 99999 is the standard choice.
Do not mix signals
If you already know the future trade (for example software publishing) but will not trade yet, some founders still use 99999 until activation, then update SIC codes on a confirmation statement. Others list intended trade codes from day one while remaining non-trading in practice. Be consistent in filings, banking applications, and HMRC letters. When unsure, ask an accountant which presentation fits your facts.
7Registered office and forwarding address
Every UK company needs a UK registered office — dormant or not. Using a home address is often legal but public. Agent addresses improve privacy. Set a forwarding address for physical items that cannot simply be scanned, including important HMRC correspondence such as your UTR letter.
8Business address options
Some packages include a business address or mail service. For a non-trading company this is optional packaging. If included, configure it correctly so you do not miss rare but important post.
9Add business forwarding details
Double-check every line of the forwarding address. Non-residents should use a destination that can actually receive international forwards.
10Company appointments overview
Appoint at least one director and provide shareholder and PSC information. A dormant company still needs human controllers on the public record. Director duties do not disappear because the company is inactive.
11Select positions for each person
Tick director, shareholder, PSC, and optional secretary roles accurately. Officers must consent to act.
12Enter officer details
Provide legal name, date of birth, nationality, occupation, residential address, and security information. Residential addresses are required even for dormant companies.
13Director service address
The service address is public. Using an agent service address is popular for privacy. Home service addresses publish home details.
14Nature of control (PSC)
Report people with significant control accurately. For a solo 100% owner, share and voting bands are typically in the highest range, with power to appoint or remove a majority of directors. Dormancy does not reduce PSC transparency requirements.
15Shareholdings
Issue at least one share to at least one shareholder. Simple structures (for example 1 or 100 ordinary £1 shares) are common for dormant name-reservation companies. Keep nominal capital modest unless advised otherwise.
16Add another person only if needed
Co-founders can be added now, but dormant multi-owner companies still need clean agreements about who pays maintenance costs and who decides when to activate trading.
17Documents and standard articles
Choose digital or printed document delivery. Standard articles are fine for many simple dormant companies. Custom articles are for special share rights designed with a solicitor.
18Business essentials and partner offers
Bank and software partner screens appear even for dormant intent. Be cautious: opening accounts and generating fees can complicate pure dormancy. If you do not need an account yet, skip optional partners. If you will open one later for a controlled reason, plan transaction hygiene first (see banking section).
19Additional services you might not need
Second-chance upsells are common. For dormant companies, default to no unless the service is dormant accounts filing help, confirmation statement help, or address maintenance you will actually use.
20Review everything — especially SIC 99999
Check name, SIC code, officers, shares, PSC statements, and addresses. A wrong SIC or misspelled director name is painful to clean up later and confuses banks.
21Submit, get incorporated, save your documents
After submission, identity checks under UK money laundering rules may apply. Many applications are approved the same day, often within about 3 to 6 working hours, depending on Companies House workload. You receive a Certificate of Incorporation and, with fuller packages, digital formation documents, registers, and sometimes a dormant company notification letter template for HMRC.
Classification
SIC Code 99999 Explained
99999 is the Standard Industrial Classification code used to indicate a dormant company on Companies House records. It is the cleanest public signal when your intent is non-activity.
- It is commonly accepted at formation for dormant / name-reservation companies.
- You can usually update SIC codes later when the company starts trading (often via the confirmation statement process).
- Related codes sometimes seen for inactive or holding situations include non-trading style codes (for example codes used for non-trading companies) — but for explicit dormancy reporting, 99999 is the dedicated choice discussed in formation workflows.
- SIC codes do not replace HMRC notification or dormant accounts eligibility tests.
Critical post-formation step
Step 5 in Practice: Inform HMRC the Company Is Dormant
This is not part of Companies House incorporation, but it is essential to how to set up a dormant UK company correctly. Unless advised otherwise, HMRC may assume a new company is active and will expect Company Tax Returns and any relevant Corporation Tax payments. Missing that path can lead to penalties.
What to do
- Wait for HMRC to issue the company’s 10-digit Unique Taxpayer Reference (UTR). It is commonly mailed to the registered office within a couple of weeks of formation.
- Send HMRC a letter (or use the then-current HMRC-accepted channel) confirming Corporation Tax dormancy.
- Include at minimum:
- Company name
- Company registration number
- Date of incorporation
- 10-digit UTR
- Aim to notify within about three months of formation (common practical guidance from formation agents and tax practice summaries — verify current HMRC instructions).
- Keep proof of what you sent and when.
Package help
Some dormant-oriented packages include a pro forma HMRC letter template. You still send it (or follow the current official process) yourself unless an authorised agent is acting for you. Templates do not file themselves.
If HMRC still issues a notice to file
Do not ignore notices. Either file as required (sometimes a nil/dormant position return depending on the notice and facts) or contact HMRC promptly to confirm dormancy and ask how they want the notice handled. Penalties can arise from silence even when the company did not trade.
Chart 4: First 90 Days After Forming a Dormant Company
A practical timeline model from incorporation to HMRC dormancy confirmation and first filing diary setup.
Stay dormant on purpose
How to Retain Dormant Status After Setup
Once formed and notified, dormancy is a maintenance discipline:
- Do not carry on business — no buying/selling goods or services as the company, no trading income.
- Avoid significant accounting transactions beyond narrow permitted items (formation share issues, certain filing fees/penalties, etc.).
- File on time — confirmation statement, dormant accounts, and any change filings.
- Maintain statutory registers and a valid registered office in the correct UK jurisdiction.
- Respond to other bodies if contacted — for example the ICO may query data protection registration if it believes the company is trading; you can usually confirm dormancy online when that happens.
- If you start trading, tell HMRC and move to active company compliance immediately.
Consequences of neglect
Failure to file can lead to late filing penalties, Companies House strike-off, fines, and in serious cases director prosecution risk. Dormant is not “set and forget.”
Annual filings
Dormant Company Accounts and Confirmation Statements
Dormancy does not remove the requirement to submit accounts. The good news: if the company is dormant for Companies House purposes for the whole financial year (no significant accounting transactions), it can normally submit dormant company accounts — simplified accounts focused mainly on basic share capital information.
Submitting dormant accounts does not “create” dormancy by itself; it is the filing available to companies that already qualify. Electronic dormant accounts filing with Companies House is typically free. The confirmation statement remains a separate annual obligation and still attracts a fee when filed online or on paper.
| Obligation | Typical dormant treatment | Fee note | Risk if missed |
|---|---|---|---|
| Dormant company accounts | Simplified accounts if eligible all year | Usually free online | Late filing penalties; public record issues |
| Confirmation statement | Still required; review officers, SIC, PSC, capital | Online fee still due (commonly cited around £34 — verify live) | Penalties; strike-off pathway risk |
| Change filings | File when officers, addresses, capital, or PSC change | Varies by filing | Inaccurate public record; compliance breaches |
| HMRC Corporation Tax | Dormancy notice; handle any notice to file | Filing itself generally free; tax due only if liability exists | Penalties; incorrect active assumptions |
Chart 5: Dormant vs Active Annual Compliance Load (Model)
Relative effort index for a simple company. Active trading adds bookkeeping, VAT/PAYE complexity, and fuller accounts — dormancy reduces but does not zero the load.
Bank setup
Bank Setup for a Dormant UK Company: Payoneer or Wise?
Banking is optional for pure name-reservation dormancy, but some founders open an account early so the company is ready later. That choice needs care: monthly fees, card spend, FX conversions, and interest can create accounting and tax complications and may undermine “no significant transactions” treatment depending on the facts.
Dormancy-first banking rules of thumb
- If you do not need an account yet, skip opening one.
- If you open one, keep transactions minimal and documented.
- Prefer fee-free structures where possible; account fees are real money movements.
- Interest on balances can be income — discuss with an accountant if balances are material.
- Never run personal expenses through the company account “because it is dormant anyway.”
- Neither Wise nor Payoneer is a traditional UK bank with identical deposit protection; both are payment/EMI-style providers with their own KYC rules. Approval is not guaranteed for dormant or low-activity profiles.
Wise Business — consider when
- You want transparent multi-currency rails ready for future activation
- You expect direct client invoicing later rather than marketplace payouts
- You value clear FX pricing when the company eventually trades
- You need tidy exports for an accountant at activation time
Full guide: how to open a Wise account.
Payoneer — consider when
- Future revenue will be marketplace or platform-heavy
- You already operate in ecosystems where Payoneer is standard
- You may need receiving accounts across corridors after activation
- You might run dual rails (Payoneer receive + another account for treasury) later
Full guide: how to open a Payoneer account.
| Factor | Wise Business | Payoneer |
|---|---|---|
| Best future use case | Direct clients, multi-currency holding, transparent transfers | Marketplace/platform payouts and global receive rails |
| Dormant-phase fit | Only if you accept KYC now and can keep the account quiet | Only if you accept KYC now and can keep the account quiet |
| Main dormancy risk | Fees, FX tests, interest, accidental spend | Fees, conversions, withdrawals, accidental spend |
| Non-resident practicality | Often evaluated by international founders; not guaranteed | Often evaluated by international founders; not guaranteed |
Chart 6: Should a Dormant Company Open a Fintech Account Now?
Decision weights for a typical name-reservation company. “Open later at activation” wins for pure dormancy more often than early account opening.
If PayPal will matter after activation, keep identity and company documents consistent from day one and read how to create a UK PayPal account as a non-UK resident.
Leaving dormancy
When You Are Ready to Start Trading
Activation is a project, not a vibe. When the company begins business:
- Tell HMRC the company is no longer dormant for Corporation Tax.
- Start proper bookkeeping from the first transaction.
- Update SIC codes if 99999 no longer describes activity.
- Open or actively use business banking with clean records.
- Consider VAT and PAYE based on real thresholds and hiring plans.
- File active-period accounts when due — dormant accounts will no longer fit periods with significant transactions.
- Align payment platforms and contracts with the company legal name.
For the broader active formation and operations path, use how to form a UK limited company with 1stfromation as your operating companion guide.
Budget honestly
True Cost of Setting Up and Keeping a Dormant UK Company
- Formation package — agent fee or direct Companies House route
- Registered office / service address renewals — often the largest recurring line for non-residents
- Confirmation statement fee — yearly
- Dormant accounts — free to file online if DIY; paid if outsourced
- Identity verification / admin time — director time is a real cost
- Banking — optional; fees can create activity issues
- Professional advice — worth it for groups, prior trading, or cross-border tax
- Strike-off vs keep — if you no longer need the name, dissolving cleanly may beat years of maintenance
Name reservation ROI check
If you are only protecting a name, estimate multi-year maintenance cost versus the probability someone else takes that exact Ltd name and how easily you could choose an alternative brand. Sometimes a trademark strategy or a different name is cheaper than a multi-year dormant company.
Avoid these
Common Mistakes When Registering a Dormant UK Company
- Forgetting to notify HMRC of Corporation Tax dormancy
- Assuming SIC 99999 alone handles tax compliance
- Believing no Companies House filings are required
- Missing confirmation statements and getting strike-off warnings
- Using a home address publicly without privacy thought
- Opening a fee-heavy account and “accidentally” trading
- Taking client money into the company while calling it dormant
- Ignoring ICO or other government letters
- Letting address services lapse without filing a new registered office
- Forming a company you do not actually need and paying years of renewals
FAQ
Frequently Asked Questions
How do I set up a dormant UK company?
Form a UK private limited company, typically use SIC 99999, complete officers and shares, incorporate at Companies House, then notify HMRC that the company is dormant for Corporation Tax. Keep filing dormant accounts and confirmation statements, and do not trade.
How do I register a dormant UK company?
Registration is standard company incorporation. Dormancy is status and filing behaviour after (and sometimes from) formation, plus HMRC notification — not a separate Companies House entity type.
What is SIC code 99999?
It is the classification code for a dormant company. Select it during formation particulars when the company will be dormant. Change it when you begin real activities if needed.
Can non-residents set up a dormant UK company?
Usually yes, with a UK registered office and proper identity checks. Read how to form a UK limited company as a non-resident for address and banking realities.
Do dormant companies need a bank account?
Not necessarily. Many name-reservation companies wait until activation. If you open Wise or Payoneer early, keep activity minimal and understand fee/interest implications. See the Wise and Payoneer guides.
Is a dormant company the same as a shelf company?
Not exactly. A shelf/ready-made company is already incorporated (sometimes aged) and sold later. A newly formed dormant company is incorporated now with inactive intent. Both can be non-trading, but history, banking perception, and due diligence differ.
Can I switch from dormant to trading later?
Yes. Notify HMRC, update records and SIC codes as needed, start bookkeeping, and file as an active company for periods with significant transactions.
Sources and further reading
Sources
Official and reference sources
Related guides
- How to form a UK limited company with 1stfromation
- How to form a UK limited company as a non-resident
- How to form a UK LLP as a non-resident
- How to start an anonymous LLC
- Best LLC formation services for non-US residents
- How to create a UK PayPal account as a non-UK resident
- How to open a Wise account
- How to open a Payoneer account
