What is an inactive company?

If you do not currently need your company, there may be benefits to retaining it for future work.
A company is inactive if it has previously been active, but is not currently trading. You may be between assignments, returning into a permanent job with full employment rights, accepting an assignment working on your client’s payroll, working through a payroll umbrella company such as Competex Pro, or simply not working for a long period of time.

To be considered inactive during its accounting year, the company will have received no income and paid no salary during the year. The only items that may appear in the accounts will be dividends, personal expenses, Competex fees, VAT payments and bank interest.

If it is likely you will continue to have a mixture of IR35 and non-IR35 work, then we recommend retaining your PSC to give you the continued flexibility that the company provides. You would be able to carry on choosing when to extract funds from the company, to suit your personal tax position each tax year.

Competex’s annual accounts fee for inactive companies is £600 + VAT per year.

Amy FowlerWhat is an inactive company?