For many business owners, freelancers, and landlords, understanding the tax implications of dormant accounts is crucial. If your company is inactive or has no significant financial transactions, you may still need to file dormant accounts with HMRC and Companies House. But why is this necessary, and how does it relate to SA105 tax returns and UTR applications?
Many landlords and self-employed individuals are also unsure about whether they need to apply for a UTR number or submit an SA105 form to report property income, especially if they are not actively trading.
This article will break down:
✅ What dormant accounts are and who needs to file them
✅ How dormant accounts affect SA105 tax returns for landlords
✅ Why you need a UTR number for tax compliance
✅ The steps to file dormant accounts and avoid penalties
1. What Are Dormant Accounts, and Who Needs to File Them?
Definition of Dormant Accounts
A dormant company is one that has had no significant financial transactions during the financial year. Even if your company didn’t trade, make sales, or receive income, you must still file dormant accounts with Companies House and may need to report to HMRC.
Who Needs to File Dormant Accounts?
✔️ Limited companies that have stopped trading.
✔️ Property investors who set up an SPV (Special Purpose Vehicle) but haven’t bought property yet.
✔️ Businesses formed but not yet started operations.
✔️ Company directors keeping a company registered for future use.
Even if your company is dormant, failing to file dormant accounts can result in penalties from Companies House and HMRC.
2. How Do Dormant Accounts Affect SA105 Tax Filing for Landlords?
Many landlords set up a buy-to-let company (SPV) but delay purchasing property due to market conditions or mortgage rates. If your SPV is dormant, you may not need to submit a corporation tax return, but you still need to inform HMRC.
If you own rental property as an individual, you must report rental income via Self-Assessment using an SA105 form.
SA105 and Dormant Accounts: When to File?
📌 If you own property as an individual → File an SA105 tax return to report rental profits.
📌 If you own property through a dormant SPV → File dormant accounts with Companies House but may not need to file SA105.
📌 If you start trading later → Update HMRC and begin submitting full accounts.
Many landlords make the mistake of assuming dormant accounts mean no tax filing is required. However, failing to submit an SA105 form for rental income can result in penalties and backdated tax payments.
3. How to Apply for a UTR Number for Dormant Companies or SA105 Filing?
A Unique Taxpayer Reference (UTR) number is a 10-digit number issued by HMRC to identify individuals and businesses for Self-Assessment tax returns.
Who Needs a UTR Number?
✔️ Self-employed individuals and freelancers.
✔️ Landlords filing an SA105 tax return.
✔️ Dormant companies that may later become active.
How to Apply for a UTR Number?
Step 1: Register with HMRC
- If self-employed or a landlord, register for Self-Assessment.
- If you run a dormant company, register for corporation tax when trading starts.
Step 2: Provide Your Details
- Company name or personal details.
- National Insurance number (for individuals).
- Business type and expected trading start date (if applicable).
Step 3: Receive Your UTR Number
HMRC will send your UTR number by post within 10-14 days. You need this to file tax returns, report rental income via SA105, or activate your dormant company when it starts trading.
4. What Happens If You Don’t File Dormant Accounts or SA105 Tax Returns?
❌ Companies House Penalties – Failing to file dormant accounts on time can lead to £150 to £1,500 fines.
❌ HMRC Investigations – If you receive rental income but don’t file an SA105, HMRC can investigate and backdate tax owed.
❌ Delayed UTR Activation – Without a UTR number, you can’t file Self-Assessment returns, potentially leading to late fees.
Even if your business or rental company is dormant, ensuring all tax and compliance filings are done on time prevents unnecessary penalties and complications.
5. Steps to File Dormant Accounts and Stay HMRC Compliant
📌 For Limited Companies (Dormant Accounts Filing)
✔️ Submit Dormant Company Accounts via Companies House online.
✔️ Inform HMRC that your company is dormant to avoid unnecessary tax returns.
✔️ File annual confirmation statements to maintain company registration.
📌 For Landlords (SA105 Filing & UTR Activation)
✔️ Apply for a UTR number if you are new to Self-Assessment.
✔️ Submit an SA105 tax return for rental income, even if profits are low.
✔️ Track deductible expenses (mortgage interest, maintenance, letting fees).
By staying compliant, landlords and business owners can avoid penalties and ensure smooth tax filings when their business or property investments become active.
Final Thoughts: Why Should You Keep Up with Dormant Accounts, SA105, and UTR Filings?
✔️ Filing dormant accounts ensures your company stays legally compliant.
✔️ Landlords must report rental income via SA105 to avoid HMRC investigations.
✔️ Applying for a UTR number early prevents tax return delays and penalties.
Whether you own a dormant buy-to-let company, need to submit SA105, or apply for a UTR number, keeping up with tax filings will ensure smooth operations and financial compliance. 🚀
Frequently Asked Questions (FAQ) About Dormant Accounts, SA105, and UTR Numbers
1. Do I need to file dormant accounts if my company is not trading?
Yes. Even if your company is not trading and has no financial activity, you must file dormant accounts with Companies House to maintain compliance. You may also need to inform HMRC that your company is dormant to avoid unnecessary tax filings.
2. When do landlords need to file an SA105 tax return?
Landlords must file an SA105 tax return if they receive rental income from residential properties in the UK. This applies whether you:
✔️ Own one or multiple rental properties.
✔️ Earn over £1,000 from renting property.
✔️ Want to claim deductible expenses such as mortgage interest, letting fees, and repairs.
3. How do I apply for a UTR number for SA105 or a dormant company?
To apply for a UTR number, follow these steps:
✔️ For landlords: Register for Self-Assessment with HMRC.
✔️ For dormant companies: Register for corporation tax only when the company starts trading.
✔️ Wait for HMRC to send your UTR number by post (within 10-14 days).
4. What happens if I don’t file dormant accounts or an SA105 tax return?
Failing to file dormant accounts can result in Companies House fines of £150 to £1,500. If you don’t submit an SA105 tax return for rental income, HMRC may issue penalties, backdate unpaid taxes, and start an investigation.
5. Can I keep a company dormant and still own rental properties?
Yes. If your buy-to-let properties are owned personally, you must file an SA105 tax return, but your company can remain dormant. If you plan to purchase properties through a limited company (SPV), the company becomes active, requiring full tax filings instead of dormant accounts.
By staying compliant with dormant accounts, SA105 filings, and apply utr number, you can avoid penalties and keep your financial records up to date. 🚀
