Forming a limited company in the UK is an attractive choice for entrepreneurs who want limited liability, tax benefits, and a professional business image. While setting up a company is relatively affordable, it’s important to understand both the initial and ongoing costs involved so you can budget effectively.

1. Companies House Registration Fees

When incorporating your company with Companies House, you must pay a registration fee. As of 2024, the current charges are:

Online application: £12 (usually processed within 24 hours)

Postal application: £40 (slower, takes around 8–10 days)

This fee covers the issue of your Certificate of Incorporation, which confirms your company is legally registered.

2. Formation Agent Services

Many new business owners use third-party company formation agents for guidance, especially if they want extra support with documents or compliance. Services may include:

Checking and reserving your company name

Preparing the memorandum and articles of association

Registering directors and shareholders

Offering ongoing compliance reminders

Typical cost: £20–£100 depending on the service package.

3. Registered Office Address

Every company must have a UK-based registered office address. You can use your home address, but it will be publicly available. To protect privacy, many owners use professional registered office services.

Using your home address: Free

Virtual office or professional service: £50–£200 per year

4. Business Bank Account

Although not a legal requirement, most limited companies open a business bank account to separate finances. Banks may charge:

Setup fees: £0–£50

Monthly account fees: £0–£20

5. Accounting and Bookkeeping

A limited company must keep accurate financial records and file annual accounts. While you can handle this yourself, most directors hire accountants.

Basic accounting packages: £100–£500 per year

Full accounting and tax services: £600–£1,500+ per year

6. Other Optional Costs

Website and domain name: £10–£100 per year

Business insurance: £100–£500+ depending on cover

Legal contracts or advice: Variable, depending on complexity

Typical Initial Costs Summary

Expense Cost Range

Companies House registration £12–£40

Formation agent services £20–£100

Registered office address £0–£200 per year

Business bank account £0–£50 setup + £0–£20 monthly

Accounting/bookkeeping £100–£500+ per year

Optional extras (insurance, website, legal) £10–£500+

Final Thoughts

The cost of setting up a limited company in the UK is relatively low, starting at just £12 for online registration. However, business owners should budget for additional services such as a registered office, accounting, and compliance support. Beyond setup, ongoing requirements like Confirmation Statement Filing and annual accounts are vital for keeping your company in good standing with Companies House.

Read Our Other Blogs Related to CS Filing:

1. Difference Between Dormant Companies and Active Companies
2. How to Add or Remove Shareholders in a Limited Company
3. What Are The Legal Duties Of A Limited Company Director?
4. How to Change Company Directors at Companies House
5. Sole Trader vs Limited Company: Which Is Best for You?
6. Understanding What a Confirmation Statement Is?
7. How UK Companies Complete Their Annual Filing
8. How to Update Company Information in a Confirmation Statement
9. The Consequences of Not Filing a Confirmation Statement
10. Understanding the Standard Industrial Classification (SIC) Code