1. Is There a Minimum Turnover for a Ltd Company?
No, there is no legal minimum turnover required to set up or run a private limited company (Ltd) in the UK. You can register and operate an Ltd company even with zero income or trading activity.
2. Why Turnover Still Matters
Although there’s no minimum turnover, it plays a key role in:
- Tax obligations
- VAT registration
- Corporation Tax filing
- Audit requirements
- Loan and investment eligibility
3. VAT Registration Threshold
While there’s no turnover minimum to register a company, you must register for VAT if your taxable turnover exceeds £90,000 in a 12-month rolling period (as of 2025). You can register voluntarily below this level.
4. Corporation Tax Obligations
All limited companies, regardless of turnover, must:
- Register for Corporation Tax with HMRC
- File a Company Tax Return annually
- Pay Corporation Tax on any taxable profits (currently 19–25% depending on profit level)
Even if your turnover is zero, you still need to file a nil return.
5. Annual Accounts and Confirmation Statement
Regardless of turnover, every Ltd company must:
- Submit annual accounts to Companies House
- File a confirmation statement every year
6. Audit Thresholds (for Larger Companies)
A statutory audit is not required for most small Ltd companies unless they exceed two of the following:
- Annual turnover > £10.2 million
- Total assets > £5.1 million
- 50+ employees
7. Micro-Entity and Small Business Reporting
Companies with low turnover may qualify as:
- Micro-entity (turnover ≤ £632,000)
- Small company (turnover ≤ £10.2 million)
These categories allow for simplified accounts and reduced reporting.
8. Operating an Inactive or Dormant Ltd Company
You can register an Ltd company and leave it dormant (no trading or income). This is common for brand protection or future planning. Dormant companies still must:
- File dormant accounts
- Submit confirmation statements
Frequently Asked Questions
Is a minimum income required to keep a Ltd company active?
No. A company can remain active with little or no turnover but must still meet legal filing obligations.
Do I have to pay tax if my Ltd company earns nothing?
No tax is due without profits, but you must still file Corporation Tax returns (even if it’s £0).
Can I run a Ltd company as a side business with low income?
Yes. Many freelancers and side hustlers use Ltd companies for tax and liability reasons.
Do I need to close my Ltd company if I have no clients?
No, but you can make it dormant or close it voluntarily if you no longer intend to trade.
Is there a financial penalty for low turnover in a Ltd company?
No penalty for low turnover itself, but fines apply if you miss filing deadlines or obligations.
Should I register as Ltd if my expected income is low?
It depends on your goals—limited liability, professional image, and tax planning may still make it worthwhile.
Conclusion
There is no minimum turnover for Ltd company status in the UK, giving you the flexibility to start small and grow. While earnings may be low initially, you still have key responsibilities to HMRC and Companies House. Staying compliant keeps your company in good standing, whether you’re trading actively or not.