Costs to set up a limited company in the UK

Setting up a business in the UK is relatively straightforward, but it will require time, planning and some upfront costs. In the following blog, we explain the initial costs of setting up your limited company or LLP. We also highlight additional and ongoing expenses that business owners should plan for in the early days.

Registering your company

The first decision when setting up any company is what business type you want to run. Once you’ve decided that you want to set up a limited company or LLP, rather than operating as a sole trader, the first step and cost is registering your company. This ensures that your company legally exists. This will incur a Companies House Registration fee, also known as the Companies House filing fee or incorporation fee. This is a one-off cost you pay for formally registering a company in the UK. The cost varies depending on whether you register online, by post or through a formations agent or accountant.

Costs for registering a private limited company in the UK online

You can register a new limited company online. The easiest way to register is through the Government portal, which provides a step-by-step guide to registering your limited company. You can also pay the registration fee online through this portal.

For online registration, there is a one-off fee that currently costs £50, but will increase to £100 in February 2026. Once completed, you will receive a notification from Companies House. Online applications are usually processed as a same-day service, but this can vary depending on the demand Companies House is experiencing.

Once you have received confirmation of your limited company registration, you can begin trading.

Costs for registering a private limited company in the UK by post

It is also possible to register a company through the post. Postal applications cost £71, increasing to £124 in February 2026. You will need to complete an INO1 form and send it to Companies House, together with a cheque addressed to Companies House.

Postal applications take, on average, 10 working days to process, but processing times vary.

Additional legal fees associated with setting up a limited company.

When you set up a limited company, you will need to create a Memorandum and Articles of Association (M&As). Your Memorandum of Association outlines your company name, registered office, purpose and share capital. Your company’s Articles of Association outline the rules for running the company as agreed upon by the shareholders.

Drafting M&As can be complex and it is advisable to consult a legal advisor to prepare these for you. Depending on how complex your business is, these costs on average range between £100 to £200 excluding VAT.

You can save on legal fees using templates for your Memorandum and Articles of association, examples of which can be obtained from government websites.

The cost of using a company formation agent to register a limited company

If registering your company yourself seems too time-consuming or complicated, you can use the services of a company formation agent such as dns accountants. These organisations support business owners with registering a new company. They are independent advisors authorised to register companies electronically with Companies House.

In addition to forming and registering your company, they can also support you with expert advice related to getting started, such as:

• The type of company best suited to your needs
• Guidance on choosing a limited company name
• Setting up your PSC (People with Significant Control) register
• Ongoing compliance support
• Advice on ongoing costs
• Registered office address
• VAT registration, if applicable
• Assistance in setting up a business bank account
• Corporation tax advice

The typical cost involved for using a company formation agent start at around £60 and increase depending on the number of services and type of support you require.

Benefits of using an accountancy firm to set up your limited company

Many accountancy firms offer company formation services, with prices varying significantly, starting at £50 to upwards of £150. At dns accountants, our limited company formation and accounts packages now have 50% off when included in our monthly accounting packages. Our registration packages help create a suitable legal entity for all types of people, whether you are a non-profit, a small startup, or an international venture. Register a company in the UK and open a business bank account today.

Working with dns accountants, our support goes beyond just company formation. We will help you remain compliant, meet your tax reporting obligations, keep finances running smoothly and make informed decisions as your business grows.

Additional compliance costs associated with setting up a limited company

Limited companies have annual obligations under company law, each of which incur costs. These include:

• Completing the Annual Confirmation Statement and submitting to Companies House: This costs £34 online or £64 for a postal submission.
• Annual accounts preparation and filing: The cost depends on the complexity of your accounts and whether you prepare them yourself or use an accountant. However, using an accountant often means you can save tax, so can be cost-effective in the long-run.
• Business bank account: You have to keep your business finances separate when running a limited company, so you’ll require a business bank account. Some banks offer these at no cost while others charge monthly fees ranging from £5-£15. Shop around for the right deal for you and your business.
• Insurance fees: Limited companies are required by law to have Employer’s Liability Insurance. Some businesses will also need Professional Indemnity Insurance and Public Liability Insurance. Costs vary widely depending on your sector’s risk profile and number of employees.
• Corporation Tax: is a tax your company or association pays to HM Revenue and Customs (HMRC) on profits in an accounting period. The amount you pay depends on your profit. You may be able to get allowances and reliefs.

There is a raft of other costs, like setting up your website, utilities, and premises, that you need to factor into your budget and planning when you establish a limited company.

Doing your research well in advance and ensuring you understand your legal obligations as the owner of a limited company, along with the costs associated with meeting them, will ensure a smooth start to your business journey.

Summary

All UK limited companies are legally required to register with Companies House. For new business owners, setting up a limited company involves submitting details and paying Companies House charges.

Total costs can vary when setting up a limited company, depending on whether you do it yourself or as part of ongoing accountancy fees. Ultimately, hiring an accountant and getting them to register your new company can save money in the long term. Using an accountant can be cost-effective as they can save time and will provide you with additional services and advice, including accounting, tax advice, VAT registration and general day-to-day compliance services for your new limited company.

If you’re thinking of setting up a company, call the dns team on 03300 886 686 or email us at [email protected]. We’ll help you move forward confidently and support you with your new venture.

About the author

Siddharth Agarwal
I am a Chartered Tax Advisor (OMB) and ACCA. I have 9+ years of experience in owner-managed business taxation issues, company reorganisations, property taxation, and succession planning. I also work with private clients on bespoke tax planning strategies for trusts, residence status, and non-residents. I aim to fulfil my professional duties towards my clients and keep them satisfied, my utmost priority. I believe in establishing and maintaining businesses and personal relationships as the key to mutual growth.