Appeal an HMRC Late Filing Penalty for a Dormant Company

By Ben Davies · Updated 26 September 2026

A dormant company that has never traded, never banked a penny of interest and never owned anything can still be charged £400 by HMRC. Not for tax — there is none — but for a Corporation Tax return HMRC asked for and did not receive. The letter that arrives is usually headed "notice of penalty determination", and it is the one HMRC penalty a dormant company is most likely to be able to do something about.

What the letter actually is

HMRC does not know your company is dormant unless its record says so. When its record says a return is due, it issues a notice to deliver one. If the return does not arrive, the penalties are automatic: no human looks at your company first, and being dormant does not stop them.

For returns due on or after 1 April 2026 the fixed penalties are £200 the day after the deadline and another £200 once the return is three months late. Before that date they were £100 each. Two further penalties, each 10% of the unpaid tax, land at six and twelve months — for a company with no tax, 10% of nothing. A third consecutive late return pushes the two fixed penalties to £1,000 each — or to £500 each where the return fell due before 1 April 2026, because that escalation sits behind the same commencement date as the £200.

So the realistic exposure for a dormant company is £400 for the period, and £2,000 if this is the third year running — £200 and £1,000 respectively where the return fell due before 1 April 2026.

Why a dormant company gets one at all

Almost always, one of three things has happened. HMRC was never told the company became dormant, so its record still expects returns. Or it was told, but a notice was issued anyway for a period that straddles the change. Or the notice went to a registered office the director no longer watches — a formation agent's address, or a flat they moved out of two years ago — and nobody saw it.

None of those is an excuse HMRC accepts on its own. They are just how the situation arises.

The route that works

Here is the part that matters, and the part most people get wrong.

You cannot argue that no return was due. Once HMRC has issued a notice to deliver, a return is legally due for that period, and a letter claiming otherwise is answered with a copy of the notice. That argument loses every time.

What you can do is ask HMRC to deal with the period properly: to record the accounting period as dormant, to withdraw the notice to deliver for it, and to discharge the penalty on the basis that the company was outside the charge to Corporation Tax. HMRC's own internal guidance sets out this route for a company outside the charge, which is why it is a real argument and not a plea.

That is exactly what our letter asks for, in those terms.

What you have to be able to say

The letter is only as good as the facts behind it, and every one of them has to be true for the whole period:

• The company carried on no trade and no business activity.
• It received no income of any kind, including bank interest. A few pounds of interest on a forgotten account is the single most common thing that makes a company not dormant.
• It made no disposals and had no chargeable gains.
• It has been dormant since incorporation, or since a specific date you can name.

If one of those is not true for the period on the notice, the company was not dormant for that period, and this is not your argument. That is worth knowing before you spend an afternoon on a letter.

The 30-day clock

The appeal window is 30 days from the date printed on the notice. Not 30 days from when it arrived, and not 30 days from when you opened it. The notice is definitive about its own date, which is one reason a notice sitting unopened at an old registered office is such an expensive thing.

If you are already past 30 days you can still appeal, and ask HMRC to accept it late with the reason for the delay — the notice went to an old address, the director was ill, the post was never forwarded. A late appeal is weaker than a timely one. It is much better than not appealing.

File the nil return as well

Whatever happens with the penalty, the return is still due. Filing it does two things: it won't cancel a penalty already charged, but it stops the return moving into the next penalty band; and it puts the company's actual position — no income, no profit, no tax — on HMRC's record rather than in a letter making a claim. An appeal that arrives alongside a filed nil return is a much tidier thing than one that arrives alone.

If the company has several years outstanding, file all of them. The third-consecutive-late-return escalation is the one that turns £400 into £2,000.

What does not work

• "I did not know I had to file." Not accepted, for any company.
• "I never got the notice." HMRC's position is that posting the notice to the registered office is delivery. If the address is wrong, that is the company's problem to fix.
• "The company is dormant so nothing was due." The two halves of that sentence do not connect, and the second half is wrong once a notice exists.
• "My accountant was supposed to do it." The directors are responsible.

How we do it

Photograph the penalty notice and the letter is read for you: what it is, which period it covers, the amount, and the date the 30 days run from. We then check it against your company's own filing history and against the public register, and tell you plainly whether the dormancy argument is available for that period — including when it is not.

Where it is, the appeal letter is written from the facts you tick and the records we already hold, in the company's name, signed by a director, from its registered office, with your reply address on it. No model writes any of it. You can print it and post it yourself, or we can post it for you and show you when it is delivered.

Key points

• A dormant company can be charged £400 for a return HMRC asked for and did not get, and £2,000 on the third consecutive late year — £200 and £1,000 where the return fell due before 1 April 2026.
• Never argue that no return was due. Ask HMRC to record the period as dormant, withdraw the notice and discharge the penalty.
• Every fact in the letter has to be true for the whole period, and bank interest is what most often breaks it.
• The clock is 30 days from the date printed on the notice. Past that, appeal anyway and ask HMRC to accept it late.
• File the nil return as well. It stops the return moving into the next penalty band and puts your position on HMRC's record.