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

Introduction

Setting up a limited company in the UK is relatively straightforward and affordable — but the ongoing costs can catch new directors off guard. From accountancy fees to Companies House filings, it's important to budget properly from the start.

This guide breaks down the typical costs involved in running a UK limited company, so you can plan with confidence.

1. Company Formation

Registering a limited company at Companies House is one of the cheapest parts of the process:

• Online registration — from £100 (same-day registration via Companies House)
• Via a formation agent — typically £120–£160, often including extras like a registered office address or model articles

This is a one-off cost. Once your company is incorporated, it exists indefinitely until you dissolve it.

2. Registered Office Address

Every UK limited company must have a registered office address — a physical UK address where official correspondence from Companies House and HMRC is sent. This address appears on the public register, so many directors choose not to use their home address.

Professional registered office address services typically cost:

• £25–£100+ per year depending on the provider and location
• Some providers include mail forwarding or scanning; others charge extra

Spectre Offices offers registered office addresses at professional UK locations with mail forwarding and scanning included, keeping your home address off the public register.

3. Director Service Address

As a company director, your personal address is also listed on the Companies House register — unless you use a director service address. This is a separate address used for correspondence directed to you personally as a director.

• Typically costs £75–£120 per year
• Often bundled with a registered office address package

4. Accountancy Fees

Most limited company directors use an accountant to handle their annual accounts, Corporation Tax return, and payroll. This is usually the largest ongoing cost:

• Basic annual accounts and CT600 — from £500–£1,500 per year for a simple company
• Full service (payroll, VAT, Self Assessment, bookkeeping) — £1,500–£5,000+ per year
• Online accountancy services (e.g. Crunch, Tide, FreeAgent) — from £60–£150 per month

While it's possible to manage your own accounts, most directors find the time saving and peace of mind well worth the cost.

5. Companies House Annual Confirmation Statement

Every limited company must file a Confirmation Statement (formerly Annual Return) with Companies House once a year to confirm that the company's details are up to date.

• Online filing — £50 per year
• Paper filing — £100 per year

This is a mandatory filing — failure to submit can result in your company being struck off the register.

6. Corporation Tax

If your company makes a profit, you'll pay Corporation Tax on those profits:

• 19% on profits up to £50,000
• 25% on profits over £250,000
• Marginal Relief applies between £50,000 and £250,000

This isn't a fixed cost — it depends entirely on your profitability. See our guide to Corporation Tax for UK limited companies for a full breakdown.

7. VAT Registration (if applicable)

If your taxable turnover exceeds £90,000, you must register for VAT. VAT itself isn't a cost to your business (you collect it from customers and pay it to HMRC), but there are associated costs:

• VAT return preparation — often included in accountancy packages
• Making Tax Digital (MTD)-compatible software — from £10–£30 per month

8. Business Insurance

Depending on your industry, you may need one or more types of business insurance:

• Professional Indemnity Insurance — from £100–£500+ per year
• Public Liability Insurance — from £60–£200+ per year
• Employers' Liability Insurance — legally required if you have employees; from £150+ per year

9. Business Banking

Limited companies are strongly advised (and in practice often required) to have a separate business bank account:

• Traditional banks — £6–£25 per month
• Digital banks (e.g. Tide, Starling, Monzo Business) — free to £10 per month

Summary: Typical Annual Costs

These figures are estimates and will vary depending on your business size, industry, and the services you use.

Keep Costs Down with a Professional Address Service

One of the easiest ways to keep your compliance costs manageable is to use a professional registered office and director service address. Spectre Offices provides both services at competitive rates, with mail forwarding and scanning included — so you stay compliant without the overhead of a physical office.