How Much Does It Cost to Register a Company in the UK?

Search for the cost of registering a limited company and you will find figures ranging from £12 to several hundred pounds. Both are technically true - and both are misleading on their own. The Companies House registration fee is modest, but it is not the full picture. A founder who budgets only for registration will be caught out by the accounting, banking, and ongoing compliance costs that come with limited company status. This guide gives you the complete, honest cost breakdown - so you can decide whether forming a limited company makes sense for your situation.

The Companies House Registration Fee: What It Costs in 2026

The standard fee for registering a private limited company online via Companies House is now £100. If you register by post using form IN01, the fee is £124. There is also a same-day registration service available for £156 if you need the company incorporated on a specific date.

For the vast majority of founders, the £100 online route is the right choice. The online process through Companies House's WebFiling service typically completes within 24 hours and sometimes faster. You do not need to use a third party to access it.

There is also an annual Confirmation Statement fee of £50 per year if filed online (£110 by post). This is a legal requirement for all limited companies and confirms to Companies House that your company's details are up to date. Budget for it from day one.

DIY vs Formation Agent: The Cost and What You Get for the Difference

Formation agents are third-party services that handle the Companies House registration on your behalf. They typically charge between £10 and £100 depending on the package - with budget services charging very little above the Companies House fee itself, and premium packages bundling in a registered address, model articles of association, and document storage.

The honest answer for most founders setting up a straightforward single-director company: you do not need one. The Companies House online registration process is genuinely accessible for a non-specialist. You choose your company name, confirm it is available, supply your details, adopt standard model articles of association, and pay £100. It takes around 15-20 minutes.

Where formation agents can genuinely help is when you are forming as part of a wider setup - for instance, your accountant offers a formation service bundled with onboarding. In that case you are not really paying extra for formation; you are paying for the relationship. Standalone formation agent fees for a standard company are largely an optional convenience cost.

Do You Need a Registered Address Service and What Does It Cost?

Every limited company must have a registered address - a UK address where Companies House and HMRC can send official correspondence. This address is publicly visible on the Companies House register. If you use your home address, it will appear there permanently, even after you change it.

Many founders - particularly those working from home - choose to use a registered address service to keep their home address private. These services typically cost between £20 and £100 per year depending on the provider and whether mail handling or forwarding is included.

• Budget registered address services (address only, no mail handling): approximately £20-£40 per year

• Standard services with mail scanning or forwarding: approximately £50-£100 per year

• Virtual office packages with meeting room access: typically £150+ per year

If you have a business premises, an accountant's address, or you are comfortable with your home address being on the public register, this is a cost you can avoid. For most home-based founders, a basic registered address service is worth the modest annual fee for the privacy it provides.

Accounting Software and an Accountant: The Ongoing Cost Most Guides Ignore

This is where the cost of running a limited company diverges sharply from a sole trader setup - and where most cost guides fall short. A limited company has statutory filing obligations that a sole trader does not: annual accounts, a Corporation Tax return (CT600), and a Confirmation Statement. These must be filed with Companies House and HMRC to deadlines or you face penalties.

You can file these yourself, but most founders use an accountant. A typical small company accountancy package costs £750 to £1,500 per year depending on the firm, your turnover, and what is included. This usually covers bookkeeping support, year-end accounts, and Corporation Tax filing. Some firms charge separately for payroll and VAT returns.

Accounting software is a separate consideration. Tools like Xero, QuickBooks, and FreeAgent (which is free with certain business bank accounts) typically cost £12 to £35 per month on a standard plan. Some accountants include software access in their fee; others expect you to pay for it separately. Ask before you sign up.

Business Banking: Which Accounts Are Free for New Limited Companies

A limited company is a separate legal entity, which means it must have its own bank account - you cannot run company money through a personal account. The good news is that several UK business banks offer free accounts for new limited companies, at least for the first year or two.

Free or low-cost options include Tide, Starling Bank, Monzo Business, and ANNA Money, all of which offer digital-first accounts with no monthly fee (or a very low one) for basic use. Traditional high street banks typically charge £5 to £12 per month for a business current account, sometimes waived for an initial introductory period.

• Digital challenger banks (Tide, Starling, Monzo Business): free or £5-£10/month for premium features

• Traditional high street banks: typically £6-£12/month, often with a free introductory period

• Some bank accounts include free FreeAgent software - worth factoring in against your accounting software budget

For a new limited company with straightforward banking needs, a free digital account is a sensible starting point. You can always switch as your needs grow.

The Realistic Total Cost of Setting Up a Limited Company in the UK

The minimum cost - DIY registration, your home address, a free bank account, and filing your own accounts - is £100 upfront and £50 per year for the Confirmation Statement. But this is not the realistic cost for most founders, and it leaves out the obligations that are genuinely difficult to meet without professional support.

Here is a realistic cost breakdown for a founder who sets up properly from day one:

• Companies House registration: £100 (one-off)

• Registered address service: £20-£100 per year (optional but recommended for home-based founders)

• Formation agent (if used): £10-£100 one-off (optional for a standard company)

• Business bank account: £0-£144 per year depending on provider

• Accounting software: £144-£420 per year (or free if included with bank or accountant)

• Accountant: £750-£1,500 per year for a basic small company package

• Confirmation Statement: £50 per year (online)

The ongoing annual cost from year two is typically £850 to £1,650 - predominantly driven by your accountancy fee and Confirmation Statement. These are real costs you are committing to when you choose limited company structure over sole trader.

Is a Limited Company Worth the Extra Cost Compared to Sole Trader?

This depends almost entirely on your profit level. The main financial argument for forming a limited company is the tax efficiency available once you are drawing a meaningful income - specifically the ability to combine a low salary with dividends, which can reduce your overall tax and National Insurance burden compared to sole trader income tax and Class 4 NI contributions.

But that benefit only materialises at a certain profit threshold. Below roughly £25,000-£30,000 in annual profit, the tax savings typically do not outweigh the additional compliance costs a limited company carries. Above that threshold - and especially as profit grows - the structure becomes increasingly worth it financially.

There are also non-financial reasons to go limited - limited liability protection, the professional perception some clients attach to Ltd status, and the ability to take on investment or add co-founders more cleanly. For some founders these factors matter more than the tax calculation.

The BGE position: do not form a limited company because someone told you it is what serious businesses do. Form one when the cost of running it is justified by the tax efficiency or structural benefits it provides for your specific situation. For many early-stage founders, starting as a sole trader and switching later is the more pragmatic route. If you are weighing up which structure fits your situation, our sole trader vs limited company comparison sets out the practical differences in detail.

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