What is the cost to set up your UK company

Introduction

When you start your own UK company, one thing to consider is what is the cost to set up your company?

First of all, are you ready to go ahead and set up your own company? If you are, there are a few ways that you can do this:

  • The first choice would be to do this yourself. You would apply directly with Companies House; 
  • Your second choice is to appoint an accountant. You may prefer to appoint a contractor specialist to look after you. You can then ask them to do this for you; 
  • As a third choice, you could opt to use a company formation agent

When we look at what is the cost to set up your UK company, there is a £12 standard fee to pay when you set up a company online with Companies House. On the other hand, if you apply through the post on a paper form, the normal charge is £40, and the same day charge is £100. With the speed that it takes to set up a new company online now, most new ones today will register via the internet.

As part of setting up your own business you ought to also give consideration to pre trading expenses. My guide on business expenses gives an overview of what you may be able to claim.

Have a read of my article covering tax tips for contractors (this is a member only article and you can read it if you sign up as a member)

In addition, I describe here the process of closing a UK company.

The different ways to form your company   

Form it yourself   

Please note, the process when you set up your new company up is not too tricky. Besides, you can do this online and follow the onscreen instructions.

Further to this, when you pay the fee online, you can pay this by debit card, credit card, or Paypal.

Form it through your accountant     

When we look at what is the cost to set up your UK company, please note, if you ask your accountant to do this, they may charge you a fee here. On the other hand, they may absorb the cost of this. That is normally the case if you sign up as a client and agree to pay them a monthly fee for their services.

Once your company has been formed you can then set up a company bank account and consider if you need to register for VAT.

Form it through a formation agent     

Once again, when we look at what is the cost to set up your UK company, if you ask a company formation agent to do this for you, there will be a charge. The fee can vary between each agent, as can the service that they provide. Some will provide some extras like setting up a business bank account and printed company papers. They may do the VAT registration and give you a mail forwarding service.

Further to this, most contractors prefer to let their accountant do this for them. Some, though, will choose to do this themselves.

The process

As part of the process, you will need to fill in several pages that are part of form IN01. The forms to fill in when you apply will need the details below:

  • the registered office address 
  • the company director details. These include the director’s name, address, date of birth, nationality and occupation 
  • the company’s proposed share capital 
  • the company’s trading activity(s) (this is signified by the SIC code)
  • the shareholder details. These include their name and addresses 
  • the details of the People with Significant Control (PSCs) 

Normally, when a UK company is registered using the Companies House online service, it is set up with the `model’ Articles of Association. Please note, this is in effect the company’s rule book, and this will govern its affairs.

The turnaround time, once the setup request is submitted, usually is one working day. Please note, this can take a bit longer sometimes, and it all depends on how busy Companies House is at the time.

As a result of setting up your company, Companies House will email to you:

  • Your Certificate of Incorporation 
  • Memorandum of Association `Company having a share capital’. This page will need attaching to the model Articles of Association. 

You can download the model Articles of Association from the link below:

https://www.gov.uk/guidance/model-articles-of-association-for-limited-companies#examples-of-model-articles

Final thoughts

I outline above what you need to consider when you take a look at what is the cost to set up your UK company

The only other ongoing cost from Companies House is £13 per year. This fee will be due when the business files its annual Confirmation Statement.

As a final note, when a company closes down, there is a £10 fee that is payable to Companies House. You send this when you submit the form to apply for this.

Link to Contractor Advice UK group on 

LinkedIn    https://www.linkedin.com/groups/4660081/

Published On: March 25th, 2021 / Categories: First timer guide, Starting Up Your Own Company / Tags: /

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