AA02 form is used to file accounts for a dormant limited liability company that has never traded with Companies House. The HMRC AA02 Form, also known as the Dormant Company Accounts form, is a specific document used in the UK for companies that are registered but have had no significant accounting transactions during their financial year. This form is specifically tailored for dormant companies to meet their legal obligation to file accounts with Companies House.
Purpose of the HMRC AA02 Form
The HMRC AA02 Form, also known as the Dormant Company Accounts form, serves a specific and crucial purpose in the UK's corporate regulatory framework. Its primary role is to facilitate compliance for companies that have not engaged in any significant financial activity during a fiscal year. By filing this form, a company officially declares that it has remained dormant, meaning it has not conducted trading activities or incurred significant accounting transactions. This declaration is not just a formality but a legal requirement that helps Companies House maintain accurate records of the operational status of companies registered in the UK. The form, therefore, acts as a communication tool between dormant companies and regulatory bodies, ensuring transparency and accountability in the corporate sector.
Who Should Use the HMRC AA02 Form
The AA02 form is specifically designed for companies that have been inactive in terms of financial transactions during their accounting period. This typically includes new companies that have not yet begun trading, companies that are holding assets but not actively trading, or companies in a state of temporary inactivity. It is crucial to note that the term 'dormant' for this purpose has a specific definition. It refers to a company that has not had any 'significant' accounting transactions during the accounting period. Significant transactions exclude actions such as payment for shares upon company formation or fees paid to Companies House for filing the annual Confirmation Statement. Understanding who should use this form is vital for compliance and avoiding potential legal issues arising from misclassification of a company's operational status.
Filing Requirements
Filing the AA02 form is not just a best practice but a statutory requirement for dormant companies in the UK. The form serves as an alternative to the more comprehensive financial statements that active companies must file. It is a simplified reporting method that acknowledges the absence of significant financial activity within the company during the reporting period. The requirement to file this form annually, regardless of the company's transactional inactivity, ensures that Companies House and, by extension, the public and other stakeholders, have up-to-date information about the status of the company. This requirement underlines the government's commitment to corporate transparency and the importance of maintaining accurate public records for all registered companies.
Content of the Form
The AA02 form is structured to be straightforward and user-friendly, reflecting the simplicity of the information required for dormant companies. It includes basic yet essential information such as the company name, registration number, and the period covered by the accounts. Crucially, it contains a statement that the company has been dormant from the time of the last accounts or since incorporation if it's the first set of accounts. This statement is a declaration of dormancy and is the core element of the form. The simplicity of the form reflects the streamlined approach adopted by Companies House for dormant companies, acknowledging that these entities do not engage in the complex financial activities that would require more detailed reporting.
How to Fill AA02 Form - A Step By Step Guide
The SA109 form is an essential part of your UK tax return if you need to declare your residence and domicile status, and claim personal allowances as a non-UK resident. Here's a detailed guide on how to fill out the SA109 form for the tax year 2023-2024.
Section 1: Residence Status
Question 1: If you were not resident in the UK for 2023–24, put ‘X’ in the box
Sample Answer: Mark this box with an ‘X’ if you lived outside the UK for the entire tax year.
Question 2: If you are eligible for overseas workday relief for 2023–24, put ‘X’ in the box
Sample Answer: Mark this box with an ‘X’ if you qualify for overseas workday relief, meaning you worked abroad and meet specific criteria set by HMRC.
Question 3: If your circumstances meet the criteria for split year treatment for 2023–24, put ‘X’ in the box
Sample Answer: If you moved into or out of the UK during the tax year and qualify for split year treatment, mark this box with an ‘X’.
Question 3.1: If more than one case of split year treatment applies, put ‘X’ in the box
Sample Answer: If you qualify for multiple split year treatments, mark this box with an ‘X’.
Question 4: If you were resident in the UK for 2022–23, put ‘X’ in the box
Sample Answer: If you lived in the UK during the previous tax year, mark this box with an ‘X’.
Question 5: If you have made an entry in box 2 and any of your foreign earnings are for an earlier year, put ‘X’ in the box
Sample Answer: Mark this box with an ‘X’ if you’re claiming overseas workday relief and some of your earnings relate to previous years.
Question 6: If you have an entry in box 3 enter the date from which the UK part of the year begins or ends DD MM YYYY
Sample Answer: Provide the exact date when your UK residency began or ended within the tax year.
Question 7: If you meet the third automatic overseas test, put ‘X’ in the box
Sample Answer: Mark this box with an ‘X’ if you qualify under the third automatic overseas test, which generally involves full-time work abroad.
Question 8: If you had a gap between employments in 2023–24, put ‘X’ in the box
Sample Answer: Mark this box if you experienced a gap between employments during the tax year.
Question 9: If you had a home overseas in 2023–24, put ‘X’ in the box
Sample Answer: Mark this box with an ‘X’ if you maintained a home overseas during the tax year.
Question 10: Number of days spent in the UK during 2023–24
Sample Answer: Enter the total number of days you were physically present in the UK during the tax year.
Question 11: Number of days in box 10 attributed to exceptional circumstances
Sample Answer: Enter the number of days from Question 10 that were due to exceptional circumstances, such as a family emergency.
Question 11.1: Number of days when you were in the UK at midnight during 2023–24, but you were in transit – do not include these days in any entry in box 10
Sample Answer: Enter the number of transit days in the UK at midnight, which should not be included in the count for Question 10.
Question 12: How many ties to the UK did you have in 2023–24?
Sample Answer: Enter the number of ties you have to the UK, such as family, accommodation, work, etc.
Question 13: Number of days you worked for more than 3 hours in the UK in 2023–24
Sample Answer: Enter the number of days you worked in the UK for more than 3 hours during the tax year.
Question 14: Number of days you worked for more than 3 hours overseas in 2023–24
Sample Answer: Enter the number of days you worked overseas for more than 3 hours during the tax year.
Section 2: Personal Allowances for Non-Residents and Dual Residents
Question 15: If you are entitled to claim personal allowances as a non-resident because of the terms of a Double Taxation Agreement, put ‘X’ in the box
Sample Answer: Mark this box with an ‘X’ if a Double Taxation Agreement allows you to claim personal allowances as a non-resident.
Question 16: If you are entitled to claim personal allowances as a non-resident on some other basis, or as a dual resident remittance basis user under the terms of certain Double Taxation Agreements (read the notes), put ‘X’ in the box
Sample Answer: Mark this box with an ‘X’ if you can claim personal allowances on another basis or as a dual resident remittance basis user.
Question 17: Enter the codes for the country or countries of which you are a national and/or resident
Sample Answer: Enter the relevant country codes indicating your nationality or residency.
Question 18: Enter the codes for the country or countries, other than the UK, in which you were resident for tax purposes for 2023–24
Sample Answer: Enter the country codes for where you were a tax resident besides the UK during the tax year.
Question 19: If you were also resident in either or both of the countries above for 2022–23, enter the appropriate codes
Sample Answer: Enter the relevant country codes if you were a resident in those countries in the previous tax year as well.
Question 20: Amount of Double Taxation Agreement income for which partial relief is being claimed
Sample Answer: Enter the amount of income for which you are claiming partial relief under a Double Taxation Agreement.
Question 21: Relief under Double Taxation Agreements between the UK and other countries – amount claimed because of an agreement awarding residence to another country – read ‘Helpsheet 302’
Sample Answer: Enter the amount claimed for relief due to an agreement assigning residence to another country, as detailed in Helpsheet 302.
Question 22: Relief claimed because of other provisions of the relevant Double Taxation Agreements – read ‘Helpsheet 304’
Sample Answer: Enter the amount of relief claimed due to other provisions of Double Taxation Agreements, as explained in Helpsheet 304.
Question 23: If you are domiciled outside the UK and it is relevant to your Income Tax or Capital Gains Tax liability for 2023–24, put ‘X’ in the box
Sample Answer: Mark this box with an ‘X’ if your domicile outside the UK affects your tax liability.
Question 23.1: If you were deemed UK domicile under Condition A, put ‘X’ in the box
Sample Answer: Mark this box with an ‘X’ if you meet the criteria for deemed UK domicile under Condition A.
Question 23.2: If you were deemed UK domicile under Condition B, put ‘X’ in the box
Sample Answer: Mark this box with an ‘X’ if you meet the criteria for deemed UK domicile under Condition B.
Question 23.3: Enter the number of years you’ve been resident in the UK in the previous 20 years
Sample Answer: Enter the number of years you have been a UK resident within the last 20 years.
Question 24: If 2023–24 is the first year you have told us that your domicile is outside the UK, put ‘X’ in the box
Sample Answer: Mark this box with an ‘X’ if this is the first year you are declaring your domicile outside the UK.
Question 25: If you have put ‘X’ in box 23 and have a domicile of origin within the UK, enter the date on which your domicile changed DD MM YYYY
Sample Answer: Provide the date when your domicile changed from the UK to another country.
Question 26: If you were born in the UK but have never been domiciled here, put ‘X’ in the box
Sample Answer: Mark this box with an ‘X’ if you were born in the UK but never domiciled here.
Question 27: If you have put ‘X’ in box 23 and you were born outside the UK, enter the date that you first came to live in the UK DD MM YYYY
Sample Answer: Provide the date when you first moved to live in the UK if you were born abroad and claimed domicile outside the UK.
Section 3: Remittance Basis
Question 28: If you are making a claim for the remittance basis for 2023–24, put ‘X’ in the box
Sample Answer: Mark this box with an ‘X’ if you are claiming the remittance basis for the current tax year.
Question 29: If your unremitted income and capital gains for 2023–24 is less than £2,000, put ‘X’ in the box
Sample Answer: Mark this box with an ‘X’ if your unremitted income and gains are below £2,000.
Question 30: If you were deemed UK domicile for 2023–24, and have remitted to the UK any of your foreign income or gains that arose in a year when you previously claimed the remittance basis, put ‘X’ in the box – give details in box 40
Sample Answer: Mark this box with an ‘X’ if you were deemed UK domicile and remitted foreign income or gains from a previous year.
Question 31: If you were UK resident for 2023–24 and for 12 or more of the preceding 14 tax years, put ‘X’ in the box – you must also fill in boxes 28, 34 and/or 35
Sample Answer: Mark this box with an ‘X’ if you were a UK resident for the tax year and 12 of the last 14 years.
Question 32: If you were UK resident for 2023–24 and for 7 or more of the preceding 9 tax years, put ‘X’ in the box – you must also fill in boxes 28, 34 and/or 35
Sample Answer: Mark this box with an ‘X’ if you were a UK resident for the tax year and 7 of the last 9 years.
Question 33: If you were under 18 on 5 April 2024, put ‘X’ in the box
Sample Answer: Mark this box with an ‘X’ if you were under 18 years old on 5 April 2024.
Question 34: Amount of income you are nominating – use the ‘Any other information’ box 40
Sample Answer: Enter the amount of income you are nominating for the remittance basis.
Question 35: Amount of capital gains you are nominating – use the ‘Any other information’ box 40
Sample Answer: Enter the amount of capital gains you are nominating for the remittance basis.
Question 36: Adjustment to payments on account for capital gains
Sample Answer: Enter any adjustments needed for payments on account for capital gains.
Question 37: If you have remitted nominated income or gains during 2023–24, put ‘X’ in the box unless what you have remitted is within the £10 aggregate limit
Sample Answer: Mark this box with an ‘X’ if you have remitted nominated income or gains, unless the total remitted is under £10.
Question 38: If you are claiming relief from UK tax for foreign income or gains invested in a qualifying business, enter the total amount invested and the Company Registration Numbers below
Sample Answer: Enter the total amount of foreign income or gains invested in qualifying businesses and provide the Company Registration Numbers.
Question 39: If you have previously claimed relief for a qualifying investment and the investment no longer qualifies for relief, put ‘X’ in the box
Sample Answer: Mark this box with an ‘X’ if your previously claimed qualifying investment no longer qualifies.
Question 39.1: If you have UK income or gains deemed to be foreign under qualifying asset holding company rules, put ‘X’ in the box
Sample Answer: Mark this box with an ‘X’ if your UK income or gains are deemed foreign under specific rules.
Section 4: Any Other Information
Question 40: Please give any other information in this space and on page RR 4 overleaf
Sample Answer: Provide any additional relevant information that supports your entries in the SA109 form, especially for complex cases requiring further explanation.
By carefully following these steps and providing accurate information, you can successfully complete your SA109 form for the 2023-2024 tax year. Always double-check your entries and consult with a tax professional if you have any uncertainties.
Detailed Guidance for Each Section
Section 1 (Company Details):
Ensure that the company number and name are exactly as registered. Double-check for typos or errors.
Section 2 (Balance Sheet Date):
The balance sheet date should reflect the end of your financial year. For most companies, this is either the end of a calendar month or a quarter.
Section 3 (Accounts):
For dormant companies, most values will be '0'. However, the share capital should be accurately reported. This section requires careful attention to ensure that the dormant status is correctly represented.
Section 4 (Director's Responsibilities):
The audit exemption statement is crucial. By ticking this, you confirm that the company meets the criteria for exemption. Ensure you understand these criteria before confirming.
The statement of directors' responsibilities is a legal declaration. Make sure the directors are aware of their responsibilities and that these have been met before ticking this box.
Section 5 (Approval and Signature):
The date should reflect when the accounts were approved by the board. It’s important for the accuracy of the records.
The signature and printed name of the director are mandatory. This provides legal authentication of the information provided.
Submission Tips:
Double-Check: Before submission, review the form thoroughly. Ensure that all entries are accurate and complete.
Record Keeping: Keep a copy of the filled form for your records. It’s essential to have a record of what was submitted in case of queries or future reference.
Timely Submission: Be aware of the submission deadline and ensure the form is submitted well in advance to avoid any late filing penalties.
Common Pitfalls:
Inaccurate Information: Entering incorrect company details or financial information can lead to compliance issues.
Missing the Deadline: Late submission can result in penalties, so it’s crucial to keep track of deadlines.
Omitting the Director’s Signature: The form is invalid without the director’s signature, so don’t forget this critical step.
Final Checks:
Consult if Unsure: If there’s any doubt about the information to be provided, consult with a professional or Companies House.
Online Filing: Consider using the online filing system for ease and to ensure all necessary information is included.
Legal Obligation
The legal obligation to submit the AA02 form is a critical aspect of corporate governance in the UK. This requirement ensures that even companies without active financial transactions remain accountable to regulatory bodies. The submission of the AA02 form is monitored by Companies House, and failure to comply can result in penalties. These penalties can range from fines to the more severe consequence of having the company struck off the register. The legal obligation to file this form underscores the principle that all registered companies, regardless of their size or level of activity, are subject to regulatory oversight and must adhere to the statutory reporting requirements.
Submission Process
The process of submitting the AA02 form is designed to be as efficient as possible. Companies can choose to file the form electronically through the Companies House web filing service or opt for the traditional postal method. The online submission method is generally preferred due to its speed and convenience. It allows for immediate confirmation of receipt and reduces the risk of delays associated with postal submissions. The online filing system is part of Companies House's broader efforts to streamline corporate filing processes, making it easier for companies to comply with their reporting obligations.
Annual Requirement
The AA02 form must be filed annually, a requirement that remains in place for as long as the company is registered as dormant. This annual filing ensures that Companies House's records are current, reflecting the company's status for each financial year. The requirement does not cease until the company either starts trading, at which point it must begin to file regular financial statements, or is formally dissolved. This ongoing obligation highlights the importance of regular updates to corporate information and the need for companies to stay vigilant about their filing duties, even when not actively trading.
Importance of the HMRC AA02 Form for Dormant Companies
The significance of the AA02 form in the corporate landscape of the UK cannot be overstated. For dormant companies, this form is a vital tool for maintaining compliance with corporate regulations. By providing a simplified means of reporting, it allows these companies to fulfill their legal obligations without the complexities and costs associated with more detailed financial reporting. The form plays a crucial role in maintaining the integrity of the corporate register, ensuring that the information available to the public and to potential investors is accurate and up-to-date. The AA02 form thus not only serves a regulatory function but also enhances the transparency and trustworthiness of the UK's business environment.
Why is a Company Inactive?
There are a number of reasons to have a dormant company that has never worked, although it is common to avoid using another company's name for the company you plan to use (or hope to use in the future).
How Long Can a Company Remain Inactive?
A corporation can remain inactive indefinitely, which is very useful if the reason for this is to prevent another corporation from using the name. However, you still need to submit a few documents and there are costs involved. The company must decide how any fees are to be paid and who is to be responsible for submitting the necessary documents.
Should a Non-Commercial Company Open Accounts?
The GOV of the UK website uses the term "Sleep for corporation tax", but is technically now "non-commercial". HMRC allows a company to be classified as a non-commercial company for a period of up to 5 years. The Company is not required to submit any invoices or tax returns to HMRC for this non-trading period.
How do I Set Up a Sleeping Business?
You do not technically create such a dormant company, but most often you create a limited company and do not start trading there. As long as a company does not buy, sell, or otherwise trade in goods or services, it is inactive.
What Should be Included in Sleeping Accounts?
Sleeping accounts are a simplified version of the accounts that all companies must submit.
Sleeping business accounts must include:
● Balance sheet (which does not show company-wide activity)
● Last year's data (for comparison)
● Waiver of control (if justified)
What is My Responsibility for a Sleeping Company?
You must notify HMRC that the company is inactive by completing and submitting Form CT41G. If it becomes active or begins to act, you must notify HMRC within three months.
Even if the company is inactive, you are not required to file a tax return or pay corporation tax, but you must submit annual accounts and a certified return to Companies House using Form AA02. You can file your dormant accounts online at AA02 form or by submitting a hard copy, and even though the company may be inactive, you should still submit them on time to avoid fines!
How a Tax Accountant Can Help You With the AA02 Form
In the UK, filing the AA02 form for dormant companies is a nuanced task, where a tax accountant can be invaluable. Here's how their expertise can assist you:
Understanding Dormancy: A tax accountant can define and confirm your company's dormant status, ensuring that it meets Companies House criteria, which is crucial before filing the AA02 form.
Accurate Completion of the Form: They are adept at accurately completing each section of the AA02 form, including the company details, balance sheet date, and accounting information, which is typically nominal for dormant companies.
Ensuring Compliance with Legal Requirements: Tax accountants ensure that all legal requirements for filing are met, including the audit exemption statement and director's responsibilities, reducing the risk of legal non-compliance.
Avoiding Common Mistakes: Their expertise helps avoid common errors such as incorrect information entry, which can lead to penalties or compliance issues.
Meeting Deadlines: Tax accountants keep track of filing deadlines, ensuring timely submission and avoiding late filing penalties.
Providing Expert Advice: They can offer valuable advice on maintaining dormant status, implications of financial transactions, and the impact of resuming business activities.
Handling Queries from Companies House: In case of any queries or issues raised by Companies House, a tax accountant can efficiently handle and resolve these, ensuring smooth processing.
Record Keeping and Documentation: They assist in maintaining necessary records and documentation, ensuring an accurate audit trail.
Online Submission Guidance: Tax accountants can guide or manage the online submission of the AA02 form through the WebFiling service, ensuring accuracy and efficiency.
Future Planning and Advice: They can provide strategic advice on future business planning, including the implications of moving out of dormancy and the necessary steps for doing so.
Clarifying Misconceptions: Tax accountants can clarify misconceptions about dormancy, such as the differences in treatment for Corporation Tax and Companies House requirements.
Assisting with Audit Exemptions: They can help determine if your company is eligible for audit exemptions and ensure this is accurately reflected in the AA02 form.
Advising on Changes in Company Structure: If there are changes in the company’s structure or shareholder patterns, a tax accountant can advise on how to reflect these changes in the AA02 form.
Liaising with HMRC: If there are tax implications associated with dormant status, a tax accountant can liaise with HMRC to ensure all obligations are met.
Financial Health Check: They can conduct a financial health check to ensure that the company maintains its dormant status, avoiding inadvertent financial transactions that could change this status.
Representation in Case of Discrepancies: In the event of discrepancies or disputes with Companies House, a tax accountant can represent your company, providing expert assistance.
Providing Peace of Mind: Knowing that an expert is handling the company's compliance can provide peace of mind, allowing you to focus on other aspects of your business or future business plans.
Educating on Compliance Requirements: They educate company directors on their legal responsibilities, ensuring a clear understanding of the compliance requirements.
Analyzing Financial Transactions: Tax accountants can analyze any financial transactions to determine their impact on the company's dormant status.
Guidance on Dissolution: If you decide to dissolve the dormant company, a tax accountant can guide you through the process, ensuring all legal and financial aspects are correctly addressed.
In summary, a tax accountant's role is pivotal in navigating the complexities of filing the AA02 form for dormant companies in the UK. Their expertise not only ensures compliance and accuracy but also provides strategic guidance for the company’s future.
In conclusion, the HMRC AA02 Form is a key component of the UK's corporate regulatory framework, specifically designed to cater to the unique needs of dormant companies. Its purpose, user base, filing requirements, content, legal implications, submission process, and annual requirements all converge to create a streamlined, efficient means for these companies to stay compliant with their legal obligations. The form’s importance extends beyond mere compliance; it is a testament to the UK's commitment to corporate transparency and accountability. For dormant companies, understanding and adhering to the requirements of the AA02 form is not just a legal necessity but a crucial part of maintaining their standing and reputation in the UK’s dynamic business landscape.
20 Most Important FAQs about AA02 Form
Q1: What is the AA02 form used for?
A: It's used by dormant companies in the UK to file annual accounts with Companies House.
Q2: Who needs to file the AA02 form?
A: Dormant companies limited by shares.
Q3: Is the AA02 form required every year?
A: Yes, it must be filed annually.
Q4: What constitutes a dormant company?
A: A company with no significant accounting transactions during the financial year.
Q5: Can the AA02 form be filed online?
A: Yes, through Companies House's WebFiling service.
Q6: What is the deadline for filing the AA02 form?
A: Typically 9 months after the company's financial year-end.
Q7: Are there penalties for late filing of the AA02 form?
A: Yes, late filing can incur penalties.
Q8: What details are required in the AA02 form?
A: Company number, name, balance sheet date, and certain financial information.
Q9: Do dormant companies need an audit?
A: Dormant companies are generally exempt from audit.
Q10: How do I determine my company’s balance sheet date?
A: It's usually the end of your financial year.
Q11: Can a recently active company file an AA02 form?
A: Only if it meets the criteria for being dormant during the relevant period.
Q12: Is professional help required to fill the AA02 form?
A: It's not mandatory but can be beneficial for accuracy and compliance.
Q13: Does the AA02 form apply to charities?
A: No, it's specifically for dormant companies limited by shares.
Q14: What happens if I file incorrect information on the AA02 form?
A: It may lead to compliance issues and potential penalties.
Q15: Can I amend the AA02 form after submission?
A: Yes, amendments can be made, but it's best to ensure accuracy before submission.
Q16: Do I need to file the AA02 form if my company hasn't traded at all?
A: Yes, if it's registered as a dormant company.
Q17: What if my dormant company starts trading?
A: You will need to file regular accounts instead of the AA02 form.
Q18: Is it free to file the AA02 form?
A: Yes, but late submissions may attract penalties.
Q19: How do I confirm my company's dormant status to Companies House?
A: By filing the AA02 form with accurate information indicating dormancy.
Q20: Can a dormant company have a bank account?
A: Yes, but transactions may affect its dormant status.