Dissolve or keep your dormant company in 2026? A real cost-benefit breakdown

By DormantFile · Updated 27 May 2026

More directors are asking this question in 2026 than ever before, and the February 2026 fee changes moved the two options in opposite directions: the confirmation statement rose from £34 to £50 a year, while the cost of a voluntary strike off fell from £33 to £13. Add ECCTA identity verification, which has put admin on every active company, and several high-street banks quietly closing accounts that show no activity, and the maths on "just leave it dormant" has shifted noticeably.

This guide walks through the real costs on both sides, the hidden traps, and a short decision framework to settle the call.

The two options at a glance

Reasons to keep it dormant

A dormant company is not free, but it does buy you optionality. The cases where keeping it makes sense:

You plan to trade again within a few years. Restarting a dormant company is fast and free. Reactivating a dormant company is just a matter of telling HMRC the company is active again and filing trading accounts at the next year end. Restoring a dissolved company is slow, expensive and not always granted.

The name has value. Once a company is dissolved, the name goes back into the pool and anyone can incorporate a new company using it. If your brand, domain or social handles are tied to that name, dissolving hands the name to whoever registers it first.

You hold an asset inside the company. Intellectual property, a domain portfolio, a trademark registration, a small shareholding — all of these need to be transferred out before strike off, otherwise they pass to the Crown under bona vacantia (more on that below). If transferring is awkward, dormancy is the cheaper option.

You want the filing history. Years of clean filing history is useful when applying for finance, leases, or supplier credit later. A new company has no track record. An old one with a decade of clean confirmation statements does.

You are not sure yet. Indecision is a legitimate reason. The cost of one more dormant year is small. The cost of a wrong dissolution is high.

Reasons to dissolve

Equally, there are clear cases where strike off is the right call.

You are genuinely finished with the venture. No plans to restart, no IP, no brand worth protecting. Paying £50 to £69 a year forever to keep a shell on the register is just a slow leak.

ECCTA admin is piling up. The Economic Crime and Corporate Transparency Act has made every active company director go through identity verification at Companies House. For one company you care about, that is fine. For two or three legacy shells you do not really need, it is friction without benefit.

Your bank has started asking questions. Several UK banks have been closing or restricting business accounts on companies showing no activity for 12+ months. If your bank has written to you, or has already closed the account, running a dormant company without a bank account is awkward — and opening a new one for a dormant company in 2026 is harder than it used to be.

You missed filings and want a clean exit. If your company is already drifting toward strike off and you have no plans to revive it, finishing the job intentionally is cleaner than letting Companies House do it for you. See what to do if your company is in CATO closed status for the messier version of this.

The annual cost just is not worth it. For a company that does literally nothing, even £50 a year is real money — and that is now roughly four times the one-off cost of closing it.

The hidden costs of dissolving

Strike off looks cheap — £13 to file a DS01. But there are two costs people often miss.

Bona vacantia. Anything still owned by the company at the moment of dissolution passes to the Crown. That includes money in the bank account. If you forget to empty the bank account before strike off, the cash is gone — recovering it requires a Treasury Solicitor application and is not guaranteed. Same goes for any unclaimed assets: domain names, IP, leftover stock, a leased asset that was never returned.

What happens to your bank account when the company is dissolved. The account is frozen the moment Companies House publishes the dissolution. Any balance is transferred to the Crown. Direct debits stop working. Refunds sent after dissolution cannot be banked. You need to close the account before the company is struck off, not after.

Restoration is expensive — and the cheap route is closed to you. This is the trap almost nobody sees coming. Administrative restoration, the £341 route, is available only where the registrar struck the company off, and only where the company "was carrying on business or in operation at the time of its striking off" (Companies Act 2006, s1025). If you applied to dissolve your own company, neither condition is met. Your only way back is a court order.

The unavoidable costs there are a £280 court fee to issue the claim, plus the Registrar's own costs — "usually in the region of £300" — which you have to pay. So roughly £580 before you have paid a solicitor anything, and most people do instruct one, which is where restorations start running into the low thousands. Restoration is also not guaranteed.

Dissolving voluntarily is, in practice, a one-way door. Compare that to £50 a year to keep the company dormant and reversible at will.

The annual cost of keeping it dormant in 2026

Let us be honest about the running cost:

• Confirmation statement (CS01): £50 a year, paid to Companies House
• Dormant accounts (AA02): £0 if you file yourself, or from £19/year via DormantFile — which also covers the nil CT600 below. See the full breakdown in our cost to file dormant accounts guide
• CT600 nil return: £0 — HMRC does not charge to file
• Bank charges: £0 if the account is closed or on a free dormant tariff; up to ~£60 a year if a paid business account is left open

Realistic annual cost: £50 if you DIY everything, £69 if you use a filing service (DormantFile at £19 plus the £50 statement fee). Miss a deadline and the late filing penalties start at £150 — so the value of getting it done on time is real.

Compare that to £13 for a one-off DS01. Before February 2026 these two numbers were close enough that break-even sat at about a year, and cost was a reasonable way to decide. It no longer is: a single dormant year now costs roughly four times what it costs to close the company permanently, and the gap compounds annually.

So the honest framing is that money has stopped being the deciding factor — the decision turns on whether you will want the company back. And that is not a cheap thing to get wrong: a company you dissolved yourself can only be brought back by court order, at £580 in unavoidable fees before any legal costs (see above). The question worth answering is not "can I afford another dormant year" but "how likely am I to need this company again?" If the answer is quite likely, £50 a year is cheap optionality and you should keep it. If the answer is almost certainly not, you are paying every year to hold open a door you will never walk through.

Cheap to close, expensive to undo. That asymmetry, not the annual fee, is the thing to weigh.

A three-question decision framework

Run through these in order. The first "no" is your answer.

1. Is there any chance — even a small one — that you will trade through this company again within 5 years? If yes, keep it dormant. The cost of one or two more years of dormancy is trivial compared to the cost of restoration.

2. Does the company hold anything worth more than £500 — a name with real brand equity, IP, a domain, cash, a contract? If yes, keep it dormant (or transfer the asset out cleanly first). Bona vacantia is not worth the gamble.

3. Does the company have at least 3 years of clean filing history you would not want to lose? If yes, lean toward keeping it dormant. That filing track record has option value for future finance applications.

If you answered no to all three, dissolve. File the DS01, close the bank account, and move on.

If you are still unsure: keep it dormant for one more year, set a calendar reminder for next April, and reassess. The filing deadlines for dormant companies are predictable, so you can plan the decision properly rather than rushing it.

For the mechanics of either route, see how to close a dormant company for the strike off process, and the difference between dissolved and dormant status if the terminology is still fuzzy.

If you decide to keep it dormant

DormantFile exists for exactly this scenario: a director who has a dormant company they want to keep on the register, but does not want to spend hours each year wrestling with HMRC and Companies House portals. We file your dormant accounts and your nil CT600 for a flat fee, on time, with proof. Have a look at how it works or the pricing.

And if you decide to dissolve instead, we do not just wave you off. Closing is included in the same subscription: we walk you through the strike-off in the right order, file the one return that might be due, tell you exactly who you must notify, and watch the register until the company is gone. An exit ramp, made as careful as the annual filing.