Starting a business in the UK is exciting and daunting at the same time due to the numerous processes entrepreneurs must consider. Registering a company in the UK enhances your entity’s credibility and professional image. But how much will it cost to register your company with Companies House?

Your decision on the method and structure to incorporate your business will determine the cost. This guide will provide details about business registration costs in the UK and the required procedures.

UK business registration costs

The cost of registering a business in the UK is based on the incorporation method. The price ranges from £50 to £71. You can choose between the £50 online or £71 postal application with Companies House.

An entrepreneur may also register via accountants or company formation agents who charge slightly more but offer additional services. When registering your business with third parties, you must consider costs such as professional advice and supplementary services like registering for trademarks or patents, logo design, virtual offices, and many more.

Additionally, different costs will arise considering the company structure. The only requirement for sole traders is to register for self-assessment with the HM Revenue Customs. The advantage of a sole trader is the simplicity and affordability, unlike most other business structures that require a formal incorporation process.

The fee for a limited liability partnership (LLP) is not expensive at £71 but entails submitting a paper application.

Further charges apply for additional services that you will require. If you need same-day incorporation, you will be charged £78. This service is essential for those who need their company status to be up and running as quickly as possible.

You can choose to incorporate your company online with Companies House, and the only fee you will be charged is £50. However, consider registering it with a company formation agent if you want a hassle-free process. To register a business in the UK, you require a registered office address, which you can get from company formation agents like Icon Offices, and benefit from affordable registration costs and supplementary services such as professional business addresses that cost you just £0.99 per week. They offer packages that suit any business and still benefit from supplementary services. If the entrepreneur tenders all the relevant documentation, they will see that the company register is completed within one business day. 

If you decide to set up a business, you must set aside funds for such purposes. That will save you from any financial burden and help you prepare yourself financially.

With Icon Offices register a limited company for just £43.99 including government fee + £700 Gifts.

Steps to register your UK business

Let’s understand the steps to take when registering your business in the UK. To have a smooth registration process, you should:

Choose a business name.

A business name is what gives the company an identity. The name has to be unique and distinct so as not to infringe on already existing names.

In the UK, there are company name rules that business owners must understand before settling for a brand name. The rules associated with choosing a company name include:

• The name must be unique and not similar to existing companies’ names.
• Insensitive words or expressions should be avoided. This includes words implying a connection with the government, suggesting business pre-eminence, and words that could be offensive.
• The name must end with either ‘limited’ or ‘Ltd’ unless your company is a registered charity.
• Must not be the ‘same as’ another company’s name.  

Choose a company structure.

Decide on a legal structure for your business. Check your company goals, financial requirements, limited liability, and legal requirements to choose the right company structure for your business. In the UK, there are many common company structures available, including:

Sole trader: This is a company structure where the individual is required to manage the company. For sole traders, profits and losses belong to them, and they are liable for the liabilities. This exposes their assets.

Limited Liability Partnership (LLP): A Limited Liability Partnership (LLP) offers limited liability to partners who want to form a business together but limit their liability to the amount they have already invested in the company.

Limited companies: This structure is a limited company and a distinct entity where the directors and company owners have limited liability. The liability of shareholders is limited to the investment in the company. This means that they are outside the control of creditors and the law.

Complete necessary documentation

The selection of directors and shareholders of the company follows after this. Here you are deciding your company structure, i.e., who will be the directors and shareholders of the company. Shareholders own the company through shares, while the director’s responsibility is running the company operations, submitting accurate financial records, and ensuring compliance with the laws.

Your company must, at least, have one human director. A corporate body can also be directors and shareholders. Directors do not need to be UK residents.

You qualify to be a director if you are at least 16 years old, not undischarged with bankruptcy, and you have not been disqualified as a company director.

Shareholders can vote on company matters. Should you have only one shareholder, your holding will represent the entire company. 

Register with Companies House

The next step after securing your company name and all necessary paperwork and defining your structure is the registration with Companies House. Understanding legal regulations becomes essential when registering a company in the UK because the process involves both complexity and considerable time. Company formation agents will manage your paperwork before submitting it to Companies House if you choose their incorporation service. It will also make things much easier for you as a business owner, and your company will be incorporated within 1 working day and enjoy other added services.

The application may take 1 to 2 working days to process at Companies House.  

HMRC registration

Sole traders must register for Self-Assessment with HMRC as their primary reporting requirement. Business owners must register with HMRC immediately after their business formation to prevent facing penalties. If you are a sole trader, you must register by October 5th of the second tax year of your business (the tax year is between 6 April and 5 April the following tax year).

Once you’ve completed incorporation with Companies House, they will issue a Unique Taxpayer Reference (UTR) number by post, which will be required for all dealings with HMRC for limited companies. Value Added Tax (VAT) is also compulsory for limited companies if, in 12 months, they make a business turnover of over £90,000 or will make one in 30 days.

Finally, entrepreneurs should research the cost of registering a business in the UK. This is extremely important in financial planning and avoiding anxiety as you register.

Frequently Asked Questions

What are the main costs for legally registering a new business in the UK?

The core cost for registering a new business with Companies House ranges from £50 to £71. The lower fee applies to the online application, while the higher fee is for paper applications. You must also account for any fees charged by third parties, such as company formation agents, if you use one.

How does the business structure I choose affect my registration fees?

The structure determines the process and costs. Limited companies and Limited Liability Partnerships (LLP) need a formal, paid incorporation process with Companies House. However, sole traders simply register for Self-Assessment with the HMRC, which does not require an upfront incorporation fee.

What is the advantage of paying for same-day incorporation services?

Same-day incorporation, which costs an additional £78, is useful if you need your business recognized quickly. This service ensures your company status is up and running as fast as possible. This speed is often essential for securing immediate contracts or financing.

Why do some entrepreneurs use a company formation agent instead of registering online themselves?

Company formation agents offer business owners a more straightforward, hassle-free process. They handle all the paperwork and ensure the necessary details are accurate before submitting them to Companies House. Many also offer extra services, such as a professional registered office address.

Apart from registration, what is the single most important step a new sole trader must take?

A sole trader must register for Self-Assessment with His Majesty’s Revenue and Customs (HMRC). This step is their main reporting requirement for tax purposes. You must complete this registration by October 5th of your business’s second tax year to avoid any penalties.

What is the difference between a company director and a shareholder?

A director is responsible for running the day-to-day operations and ensuring the company follows all laws and financial rules. A shareholder legally owns the company through their shares and can vote on major company matters. A limited company must have at least one human director.

Is it a myth that only UK residents can be directors of a new UK limited company?

Yes, that is a common misconception. The rules clearly state that directors of a UK company do not need to be residents of the United Kingdom. This makes the UK a flexible option for global entrepreneurs looking to incorporate.

What is the process for choosing—and securely registering—a unique business name?

First, ensure your chosen name is unique and not too similar to any existing company names. It must also end with ‘limited’ or ‘Ltd’, unless it is a registered charity. Once you decide on a name, it gets reserved during the company registration process with Companies House.

When does a new limited company need to register for Value Added Tax (VAT) with HMRC?

Limited companies must register for VAT if their total business turnover exceeds £90,000 within any continuous 12-month period. You must also register if you expect to hit that turnover threshold in the next 30 days.

What is a Unique Taxpayer Reference (UTR) number, and why is it important after incorporation?

The UTR number is a unique code that serves as your company’s tax identification. Companies House issues this important number to you by post after your incorporation is complete. You will need the UTR for all official dealings you have with HMRC.

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