Standard Industrial Classification (SIC) codes are used to classify businesses in the United Kingdom according to their business activities. They are essential to getting right while establishing your limited company or potentially diversifying your business.
Siddharth Agarwal, Tax Director at DNS Accountants, explains the Standard Industrial Classification (SIC) codes and their significance to limited companies.
- What is a Standard Industrial Classification (SIC) code?
- What are SIC codes used for?
- How are Standard Industrial Classification (SIC) codes classified?
- Does my company need a SIC code?
- How can I determine the correct SIC code for my company?
- Is it possible for my business to have multiple SIC codes?
- What importance do SIC codes have?
- Do limited liability partnerships (LLPs) require a Standard Industrial Classification (SIC) code?
- Is it possible to change or update my SIC code?
- Which SIC codes apply to dormant and non-trading businesses?
What is a Standard Industrial Classification (SIC) code?
A SIC code is a five-digit code that Companies House uses to classify your business activities. It allows Companies House and other organisations to classify businesses according to their industry.
SIC codes are also used in other countries, and each country has its unique set of SIC codes (for example, NACE in the European Union).
What are SIC codes used for?
Several government organisations, including Companies House, the Office for National Statistics (ONS) and the Health and Safety Executive (HSE), use SIC codes. These organisations use SIC codes to measure, analyse, and share data among themselves and for the purpose of official statistics. For example - They use these codes to keep track of the number of companies operating in various industry sectors, analyse existing or emerging trends, and monitor the UK economy by sector.
Your SIC code, and other company information registered with Companies House, will also be publicly accessible on the public register of companies.
Other businesses may also use SIC codes for the purpose of marketing or to find your business. This enables people seeking to contact companies in a certain industry to do so more accurately by using SIC codes. Additionally, you can use SIC codes to identify businesses that do similar activities, operate in your sector, or market to your target customers.
How are Standard Industrial Classification (SIC) codes classified
SIC codes are divided into groups based on trade (using the letters A to U) and then further divided into subgroups. For example, Section J is designated as Information and Communications, and this section has numerous five-digit codes:
|62012||Business and domestic software development|
|62020||Information technology consultancy activities|
|62030||Computer facilities management activities|
|62090||Other information technology service activities|
|63110||Data processing, hosting, and related activities|
The complete list of SIC codes can be easily accessible on the Companies House website.
Does my company need a SIC code?
The clear answer is that it does. When registering as a limited company in the United Kingdom, each limited company must obtain a SIC code. Without a SIC code, you will be unable to incorporate or register your company.
Additionally, you will be required to use it while completing your company's Confirmation Statement (annual return).
Even if a limited company is not in operation, it must have a SIC code. When registering for VAT, you will also need a SIC code.
How can I determine the correct SIC code for my company?
Use the Companies House SIC code list. to get the appropriate SIC code for your business. This also has a search option based on keywords, which is excellent for initiating a search for information that may be relevant to your business.
This is by no means an entire list; some are extremely specific, while others are more generic. Take your time finding the nearest SIC code that describes the activities of your business.
Is it possible for my business to have multiple SIC codes?
The majority of firms find that one SIC code is sufficient. On the other hand, if your business engages in various distinct business activities, you may register up to four SIC codes.
What importance do SIC codes have?
SIC codes are essential for registering and incorporating your business, registering for VAT and filing annual returns.
Do limited liability partnerships (LLPs) require a Standard Industrial Classification (SIC) code?
Limited Liability Partnerships (LLPs), sole traders and other partnerships do not require SIC codes.
Is it possible to change or update my SIC code?
Your business SIC code might be changed as it grows or diversifies. Every business must confirm or change its SIC code on the Confirmation Statement each year. If you wish to update your SIC code prior to the due date for your Confirmation Statement, you may do so by filing it early.
Which SIC codes apply to dormant and non-trading businesses?
If your business is dormant or engaged in a non-trading activity, you will use one of the following codes. The SIC code for dormant businesses is 99999. 74990 is the SIC code for non-trading companies.
If your dormant or non-trading company becomes active, you must update your next Confirmation Statement with the appropriate SIC code.
SIC code summary
SIC codes are essential and required for all limited companies and limited liability partnerships in the United Kingdom. A limited company cannot be registered with Companies House unless it has been assigned a SIC code. Choose your SIC code(s) (up to four in total) from the Companies House list and, if necessary, update it via your next Confirmation Statement.
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