Will HMRC cancel a late filing penalty if my company was dormant?

By Ben Davies · Updated 26 September 2026

Sometimes. Dormancy is a real argument with HMRC, which is the opposite of the position at Companies House — but it is an argument you have to make, on time, and with facts that hold.

Why it is an argument at all

A company that was outside the charge to Corporation Tax for the whole period should not be carrying a penalty for a return on that period. HMRC's own internal guidance sets out the route: the period is recorded as dormant, the notice to deliver is withdrawn, and the penalty determination is discharged.

What you are not allowed to say is that no return was due. A notice to deliver makes a return due, full stop, and a letter arguing otherwise gets a copy of the notice back. The ask is narrower and stronger: deal with the period properly, and the penalty goes with it. Our full guide to appealing an HMRC late filing penalty for a dormant company sets out what the letter has to say.

What has to be true

All of it, for the whole period:

• no trade and no business activity
• no income of any kind, including bank interest
• no disposals and no chargeable gains

Bank interest is what usually breaks this. A company with £12 of interest on an old account was not dormant for Corporation Tax that year — nor under the Companies Act — and the argument is not available.

The clock

Thirty days from the date printed on the notice. Past that, you can still appeal and ask HMRC to accept it late, saying why it is late — the notice went to an old registered office, the director was ill, the post was never forwarded. Weaker than a timely appeal, and far better than none.

File the return too

The return is still due. Filing it won't cancel a penalty already charged, but it stops the return moving into the next penalty band. It also puts the company's real position on HMRC's record instead of leaving it as a claim in a letter. An appeal alongside a filed nil return reads very differently from one on its own.

What will not work

"I did not know." "The notice went to the wrong address." "My accountant was handling it." None of those is accepted on its own, for any company, dormant or not.