If you want to start a business in the UK, one of the most common ways is through incorporating a limited company. 

There are various business structures in the UK that one may start a business through. The most common ways are:

  • Sole-trader
  • Limited company 
  • Partnership 

It is ultimately up to you to decide which structure fits you best. Each has its own tax implications and regulatory requirements. 

However, assuming that you wish to start a limited company in the UK, below are some of the costs that you will incur.

Accounting 

Limited companies require the director(s) to submit annual accounts. Preparing and filing a limited company’s accounts, in most cases, will require an accountant’s assistance. 

The costs of an accountant can vary based on: 

  1. Your business 
  2. Location

Generally, you can expect to pay your accountant anywhere between £500-£2000 per year. 

These are broad estimates, and you may even have to pay more in certain circumstances. 

Registered address

UK limited companies require a registered address. If you have an office, then that address will suffice. 

However, if you do not have an office, there are two options:

  1. Home address: this may not be possible in all circumstances, but it may be an option. However, in the interest of privacy, I strongly advise against this option. 
  1. Virtual address: this is an address that you pay for, and may also include postal collection services. The cost can range anywhere from £5-£100 per month. 

Confirmation statement

Limited companies are required to file a Confirmation Statement every year, which costs £13. 

On many occasions, this fee will be covered by your accountant as part of their services.

Company incorporation

Depending on how you incorporate your company, there is an incorporation fee. 

The cost can range from £10 to £40.

Corporation tax

This will depend on whether your UK limited company makes a profit. 

Currently, the UK’s corporation tax rate is per below:

19% : for limited companies with profits between 0-£50,000 

25%: for limited companies with profits above £250,000 

For full information, please refer to the UK Government’s website.

These are some of the general costs of running a UK limited company. 

If you are planning to start a business in the UK and need help, get in touch with me to start your journey today.

Sohrab Vazir at NatWest Great British Entrepreneur Awards

About | My name is Sohrab Vazir. I’m a UK-based entrepreneur and business consultant. At the age of 22, and while I was an international student (graduate), I started my own Property Technology (PropTech) business, StudyFlats which I scaled to over 30 UK cities. I currently help other entrepreneurs and businesses of all size across several domains. For my credentials, please see here.