Dormant according to Companies House
Your company is called dormant by Companies House if it’s had no ‘significant’ transactions in the financial year.
Significant transactions don’t include:
- filing fees paid to Companies House
- penalties for filing the accounts late
- money paid for shares when the company was incorporated
- More information can be found here.
Dormant for Corporation Tax purposes
HMRC views a dormant company as a company that’s not active, not liable for Corporation Tax or not within the charge to Corporation Tax. More information can be found here.
Today a question cropped up – should accountant always take wet signatures from clients as their approval?
HMRC is of the opinion that it is not compulsory.
Client can give approval by electronic or non-electronic means.
Source Link: http://webarchive.nationalarchives.gov.uk/20140206222144/http://www.hmrc.gov.uk/ebu/2012-copyspec.pdf
How many companies are registered with Companies House UK ?
Circa 3.8 million
How many new companies are formed each year ?
How many individual annual accounts Companies House is expecting each year ?
Circa 2.9 million
How many individual annual accounts are actually received by Companies house each year ?
Circa 2.7 million
i.e. 200k companies are late or do not file the accounts at all.
What is it ?
A company in the UK qualifies as a Small Company if it fullfills two of the following three criterias:
Turnover – not more than £6.5m
Balance sheet total – not more than £3.26 m
Employee – not more than 50
UK Government has increased these limits to comply with EU Accounting Directive
via a new regulation
Turnover – not more than £10.2m
Balance sheet total – not more than £5.1 m
Employee – remain same at 50.
From when the rules change ?
Rules change for accounting period begining on or after 1 Jan 2016.
Why it is important ?
Small companies donot have to get their books audited.
This will reduce the administrative burden on lot of small companies and allow them to focus on their business.