Cost of Running a UK Limited Company: Every Fee, Tax, and Deadline Explained

Incorporating a UK limited company costs £100 online. Most founders know that number before they even start the process. What catches them off guard is everything that comes after — the annual filing fees, the Corporation Tax bill, the late-penalty regime that starts at £150 and escalates to four figures, the professional costs that quietly compound, and the address services that are optional on paper but essential in practice.

After helping thousands of founders and accountants manage their Companies House filings, we've found that most first-time directors underestimate their annual running costs by 40–60%. Not because the fees are hidden — they're all published on GOV.UK — but because nobody puts them in one place and explains which are mandatory, which are conditional, and which are the ones that quietly turn into penalties if you forget.

This guide lays out every cost you will face as a UK limited company director in 2026 — from the one-off formation fee to the recurring annual obligations. Bookmark it. You will come back to it.

Formation costs: the one-off starting price

Every UK limited company begins with an incorporation application to Companies House. There are three routes, and the fee varies:

• Online incorporation: £100 — submitted via the Companies House web service or through an authorised formation agent. This is how the vast majority of companies are formed. Turnaround is typically 24 hours, though same-working-day is common.
• Paper incorporation: £124 — form IN01 posted to Companies House. Takes 8–10 working days. There is no good reason to use this route unless your circumstances specifically require it.
• Same-day incorporation: £156 — available via software filing only. Application must be submitted and accepted by 3pm for guaranteed same-day processing.

Since 18 November 2025, every director and PSC named in the incorporation must have completed identity verification — either through GOV.UK One Login (free) or via an Authorised Corporate Service Provider (ACSP). This is a one-off verification per person, not per company. If you've already verified your identity for one company, you don't need to do it again. Using an ACSP typically adds £25–£75 to your formation cost, though many formation agents bundle it into their service fee. Read more in our identity verification explainer.

Beyond the Companies House fee and identity verification, formation itself has no other mandatory costs. You do not need a solicitor, an accountant, or a company secretary to incorporate. You do not need a business bank account at the point of incorporation (though you will need one in practice — more on that below).

Annual Companies House obligations and their costs

Once your company is on the register, two annual filings are non-negotiable. Both run on fixed cycles tied to your date of incorporation, and both carry consequences if you miss them.

Confirmation statement

Every company must file a confirmation statement at least once every 12 months. This tells Companies House that the information it holds about your company — registered office, directors, shareholders, PSCs, SIC codes — is still correct. You must file it even if nothing has changed.

• Online: £50 per statement
• Paper: £110 per statement

The review period runs 12 months from incorporation (or from the date the last confirmation statement was made to). You then have a 14-day filing window after the review period ends. Missing this deadline doesn't trigger an automatic fine — instead, Companies House begins the process of striking your company off the register. Restoring a struck-off company can cost hundreds of pounds and take several weeks or longer, plus any outstanding filings still need to be submitted. The administrative restoration fee alone is £341. Filing the £50 confirmation statement on time is dramatically cheaper. Our confirmation statement service ensures it never slips.

Annual accounts

Every company must file annual accounts with Companies House. There is no Companies House filing fee for annual accounts — the cost is in the preparation.

• First accounts deadline: 21 months from the date of incorporation.
• Subsequent accounts deadline: 9 months after the end of the accounting reference period.

Dormant companies can file simplified dormant accounts for free using the Companies House online service. Active companies need proper accounts prepared — which is where accountant fees come in (covered below). For a detailed breakdown of deadlines and the penalty escalation, see our annual accounts guide.

Late filing penalties for accounts are automatic and non-negotiable:

• Up to 1 month late: £150
• 1–3 months late: £375
• 3–6 months late: £750
• More than 6 months late: £1,500

These penalties double if you file your accounts late two years in a row. A company that misses the deadline by six months in consecutive years faces a penalty of £3,000. There is no appeals process based on ignorance — the deadlines are fixed from the moment of incorporation.

Companies House fees for changes and updates

Companies don't stand still. Directors join and leave, shareholders change, addresses move, names evolve. Most change-of-details filings at Companies House are free, but a few carry fees:

Free filings

• Director appointment (AP01): free — must be filed within 14 days of appointment (s. 167, Companies Act 2006). See our director appointment guide.
• Director termination (TM01): free — must be filed within 14 days.
• Change of registered office (AD01): free. Our guide walks through the process.
• Change of director details (CH01): free.
• PSC notifications (PSC01–PSC09): free — must be filed within 14 days of a change. A person is a PSC if they hold more than 25% of shares or voting rights (exactly 25% does not qualify). Read more in our PSC filing guide.
• Share allotment (SH01): free. See our guide to issuing shares.

Filings with fees

• Change of company name (NM01): £20 online / £30 paper. Same-day: £85. See our name change guide.
• Voluntary strike off (DS01): £13 online / £18 paper.
• Administrative restoration: £341 (paper only).

The good news: the filings founders need most frequently — director changes, share allotments, PSC updates, and address changes — are all free at Companies House. The cost is in the time it takes to get the forms right, which is why many directors use a service like Filing HQ to handle them.

HMRC tax obligations: what you owe and when

Companies House handles the corporate register. HMRC handles tax. The two are separate systems with separate deadlines, and confusing them is one of the most common mistakes new directors make. Here is what HMRC expects from your limited company.

Corporation Tax

Every UK limited company that is trading must register for Corporation Tax with HMRC within three months of starting business activity. Note: this is three months from when you begin trading — invoicing, signing contracts, advertising, renting property, employing people, or earning bank interest — not three months from incorporation.

The current Corporation Tax rates are:

• Small profits rate: 19% — on profits up to £50,000
• Main rate: 25% — on profits over £250,000
• Marginal relief applies to profits between £50,000 and £250,000

Key deadlines:

• Corporation Tax payment: due 9 months and 1 day after the end of the accounting period.
• CT600 return: due 12 months after the end of the accounting period.

CT600 late filing penalties were increased for returns with a filing date on or after 1 April 2026:

• 1 day late: £200
• More than 3 months late: additional £200
• Three consecutive late returns: the two fixed penalties rise to £1,000 (initial) and £2,000 (the 3-month penalty)
• 6 months late: 10% of unpaid Corporation Tax
• 12 months late: a further 10% of unpaid Corporation Tax

VAT

VAT registration is only mandatory once your taxable turnover exceeds £90,000 in any rolling 12-month period, or you expect to exceed it in the next 30 days. It is not triggered by incorporation. Voluntary registration below the threshold is permitted and may make sense if your customers are VAT-registered businesses.

VAT registration itself is free. The cost is in the compliance: quarterly VAT returns, accurate record-keeping, and Making Tax Digital (MTD) compatible software (typically £10–£50/month for cloud accounting tools like Xero, FreeAgent, or QuickBooks).

PAYE and employer costs

PAYE registration is only required if you pay salaries — to employees or to a director drawing a regular wage. It is not triggered by incorporation or by paying dividends. You must register before the first payday, ideally two or more weeks in advance.

If you register for PAYE, you take on employer obligations:

• Employer's National Insurance: 15% on earnings above the secondary threshold of £5,000 a year (about £96/week) for 2026/27
• Workplace pension auto-enrolment: minimum employer contribution of 3% of qualifying earnings
• Real Time Information (RTI): payroll reported to HMRC on or before each payday
• Employer's liability insurance: legally required as soon as you have employees (even one)

Many single-director companies avoid PAYE entirely by paying the director through dividends only. Our guide to paying yourself as a director covers the salary-vs-dividends trade-off in detail.

Dividend tax

If you pay yourself through dividends, those dividends are taxed at the shareholder's personal tax rate. From 6 April 2026 (the 2026/27 tax year), the dividend tax rates are:

• Basic rate: 10.75%
• Higher rate: 35.75%
• Additional rate: 39.35%

These increased from 8.75% / 33.75% / 39.35% respectively, following a two-percentage-point rise at the basic and higher bands. The dividend allowance (the amount you can receive tax-free) is currently £500 per year.

Address services: registered office and service address

Every UK limited company must have a registered office address in England and Wales, Scotland, or Northern Ireland (matching the jurisdiction of registration). This is where Companies House and HMRC send official correspondence, including your company UTR, authentication code, and penalty notices.

You can use your home address. But the risks are significant: your home address becomes permanently visible on the public Companies House register (even if you later change it, historical filings remain), it's searchable by anyone with an internet connection, and it mixes personal and business correspondence.

Professional registered office services typically cost:

• Basic registered office: £30–£100/year — provides an address for the register and forwards official mail.
• London service address: £50–£150/year — a prestigious London address for correspondence. Filing HQ offers this through our London service address service.
• Virtual office with mail scanning: £100–£300/year — all post opened, scanned, and emailed to you.

Directors also have a service address on the public register, which can differ from the registered office. This is the address shown alongside your name on the Companies House record. Using a service address (rather than your home) is particularly important if you're running your company from abroad.

Business banking: not legally required, but practically essential

A UK limited company is not legally required to have a separate business bank account. However, it is practically essential: it strengthens the separation between your personal and company finances (which protects the limited liability that is the whole point of incorporating), simplifies bookkeeping, and is required by most lenders, investors, and payment processors.

Costs vary widely:

• Digital-first banks (Starling, Tide, Monzo Business): typically free for basic accounts, with fees for extras like international transfers or cash deposits.
• High-street banks (Barclays, NatWest, HSBC, Lloyds): often free for 12–18 months, then £5–£15/month depending on the account and transaction volume.

Read our guide to opening a business bank account for a full comparison.

Professional services: accountants, bookkeepers, and company secretaries

You are not legally required to hire an accountant or a bookkeeper for a private limited company. But unless you have the expertise and time to prepare statutory accounts, calculate Corporation Tax, and submit RTI payroll reports yourself, professional help is one of your largest — and most important — running costs.

Accountant fees

Typical annual accountancy fees for a small UK limited company range from:

• Dormant company (accounts only): £100–£300/year
• Micro-entity or small company with simple affairs: £500–£1,500/year
• Active company with payroll, VAT, and multiple directors: £1,500–£5,000+/year

These fees usually cover year-end accounts preparation, Corporation Tax return (CT600), and basic advisory. Bookkeeping, payroll processing, and VAT returns are often charged separately.

Company secretary

Private limited companies are not required to appoint a company secretary (Companies Act 2006, s. 270 removed this requirement, effective 6 April 2008). Public limited companies must have one and the secretary must meet qualification requirements (s. 273). If you choose to appoint one, the appointment (AP03) and termination (TM02) forms are free at Companies House. Read our company secretary guide for more detail.

The costs founders consistently overlook

Beyond the obvious formation, filing, and professional fees, several costs catch founders by surprise year after year.

Statutory registers and record-keeping

Since 18 November 2025, ECCTA has slimmed down the statutory registers a company keeps. You no longer keep your own registers of directors, directors' residential addresses, secretaries, or PSCs — Companies House now holds that information centrally. You must still keep a register of members (shareholders) at your registered office or a SAIL address, along with copies of any charge instruments. For the register of members, your internal record — not the public Companies House view — remains the authoritative legal record of share ownership.

Accounting records must be retained for at least six years from the end of the accounting period. Cloud accounting software (£10–£50/month) makes this easier, but it is an ongoing cost.

Insurance

Depending on your business activity, you may need:

• Employer's liability insurance: legally required as soon as you hire anyone (£50–£200/year for small employers).
• Professional indemnity insurance: required or expected in many professional services sectors (£100–£500+/year).
• Public liability insurance: not legally required for most businesses, but often expected by clients and landlords (£50–£200/year).
• Directors' & officers' insurance (D&O): covers personal liability arising from decisions made as a director — especially relevant if you serve as a director of multiple companies (£100–£500+/year).

Software and tools

Modern limited companies typically need at minimum:

• Cloud accounting software: £10–£50/month (Xero, FreeAgent, QuickBooks)
• Payroll software: £5–£15/month if running PAYE (often bundled with accounting software)
• MTD-compatible VAT software: required if VAT-registered (usually covered by the accounting software above)

Domain, email, and web presence

A .co.uk domain costs £5–£15/year. Business email hosting (Google Workspace, Microsoft 365) runs £5–£10/month per user. These are small individually but add up, especially if you have multiple team members.

What happens when you miss a deadline: the penalty stack

UK limited company penalties are designed to escalate. A single missed deadline is manageable. Multiple missed deadlines compound quickly and can spiral into involuntary strike-off.

Companies House penalties

• Late accounts: £150 → £375 → £750 → £1,500, doubling if late for two consecutive years.
• Late confirmation statement: no automatic fine, but triggers strike-off proceedings. Restoration costs £341 plus any outstanding filing fees and professional costs to sort out the mess.

HMRC penalties

• Late CT600 return: £200 at 1 day late, plus £200 at 3+ months, plus 10% of unpaid tax at 6 months, plus another 10% at 12 months. Repeatedly late (three years running)? The two fixed penalties rise to £1,000 and £2,000.
• Late Corporation Tax payment: daily interest accrues from the day after the deadline until the tax is paid (the rate is the Bank of England base rate plus 4 percentage points, and is not tax-deductible). Unlike Self Assessment, Corporation Tax has no fixed late-payment penalty surcharge — the cost of paying late is the interest itself.
• Late VAT returns: a default surcharge regime that starts as a warning and escalates to percentage-based penalties on the VAT due.

Our guide to company strike-off explains what happens when multiple deadlines are missed and the company ends up removed from the register.

Total annual cost: a realistic breakdown

Here is what a typical first-year and ongoing annual cost looks like for a small, actively trading UK limited company with a single director-shareholder and no employees:

Year one (formation year)

• Incorporation (online): £100
• Identity verification (if via ACSP): £25–£75
• Confirmation statement: £50
• Registered office address: £30–£100
• Accountant (year-end accounts + CT600): £500–£1,500
• Cloud accounting software: £120–£600
• Business bank account: £0–£60 (often free in year one)
• Total year one: approximately £825–£2,485

Ongoing annual cost

• Confirmation statement: £50
• Registered office address: £30–£100
• Accountant: £500–£1,500
• Cloud accounting software: £120–£600
• Business bank account: £0–£180
• Insurance (if applicable): £50–£500
• Total ongoing: approximately £750–£2,880/year

Add PAYE, VAT compliance, and higher-end professional services if your company grows, employs staff, or crosses the VAT threshold. The costs scale with complexity, but the base compliance floor — confirmation statement, accounts, registered office, and Corporation Tax — remains the same for every company.

How to keep running costs under control

You cannot avoid the mandatory Companies House and HMRC obligations, but you can manage the cost of meeting them.

1. Bundle compliance into a single annual fee. Services like Filing HQ's packages combine registered office, identity verification, and annual filings so you're not paying piecemeal or chasing deadlines yourself.
2. Use cloud accounting from day one. Retroactive bookkeeping is expensive. Recording transactions in real time means your year-end accounts cost less to prepare.
3. File everything online. Paper filing is more expensive at every step: £124 vs £100 for incorporation, £110 vs £50 for the confirmation statement, £30 vs £20 for a name change. There is no upside to paper.
4. Set calendar reminders for every deadline. The single most expensive thing a founder can do is forget. A £150 accounts penalty is avoidable. A £341 restoration fee is avoidable. A £1,000+ penalty for repeated late CT600 returns is avoidable. The filing itself takes minutes — it's the forgetting that costs money.
5. Review your accountant's scope annually. As your company evolves, make sure you're paying for services you actually use and that your accountant is aware of changes to your structure (new shareholders, new directors, dormancy periods).

Frequently asked questions

How much does it cost to register a UK limited company?

Online incorporation costs £100 via the Companies House web service. Paper filing costs £124, and same-day incorporation costs £156. You'll also need to complete identity verification — free via GOV.UK One Login, or typically £25–£75 through an ACSP. So the total formation cost ranges from £100 to £231 depending on the route you choose.

What are the minimum annual costs for a UK limited company?

At a bare minimum, a dormant company with its director's home address as the registered office would pay £50/year — just the confirmation statement. An actively trading company realistically spends £750–£2,000/year when you factor in the confirmation statement, accountant fees for statutory accounts and the CT600, and basic software and banking costs.

Is a business bank account legally required for a UK limited company?

No. There is no legal requirement for a UK limited company to have a separate business bank account. However, it is strongly recommended: it maintains the separation between personal and company finances, simplifies your bookkeeping, and is expected by most banks, lenders, payment processors, and investors.

What penalties apply if I file my accounts late?

Companies House imposes automatic penalties: £150 for up to one month late, £375 for one to three months, £750 for three to six months, and £1,500 for more than six months. These penalties double if accounts are filed late two years running.

Do I need to pay for a registered office address?

Not necessarily — you can use your home address for free. But your registered office address is publicly visible on the Companies House register, and historical addresses remain visible even after you change it. A professional registered office service typically costs £30–£100/year, which most founders consider worthwhile for privacy.

When do I need to register for VAT?

You must register for VAT when your taxable turnover exceeds £90,000 in any rolling 12-month period, or you expect it to exceed £90,000 in the next 30 days alone. Registration itself is free, but it adds quarterly reporting obligations. You can also register voluntarily below the threshold if it benefits your business.