Limited Company Setup Costs in the UK: 2025 Guide
Setting up a UK limited company is straightforward and surprisingly affordable, with options ranging from Companies House to agents and accountants. Ongoing costs are minimal, mainly accounting and statutory fees.
Navigating the Costs of Setting Up a Limited Company in 2025
Setting up a limited company in the UK is a milestone that often marks the start of an empowering entrepreneurial journey. For IT contractors and independent professionals, understanding the true costs and options involved in company formation isn’t just smart – it’s essential. Let’s unpack the facts behind limited company setup in 2025, so you can step forward with confidence.
The price tag for starting a company in the UK today is a fraction of what it used to be – making business ownership more accessible than ever.
The Three Main Routes to Company Formation
When registering a company, three main paths dominate, each with its own price tag and advantages:
1. Direct Through Companies House
- Web Incorporation (£50):
- Fast, digital, and straightforward
- Payment by credit/debit card
- Typically completed within 24 hours – often just a few
- Paper Application (£71):
- Slower due to postal processing backlog
- Requires Form IN01
- Not recommended unless absolutely necessary
"It’s taking much longer than usual to process paper documents sent to us by post. Use our online services where possible." – Companies House
Bonus: If you incorporate directly, your company is also registered for Corporation Tax and as an employer with HMRC, saving you further admin.
2. Company Formation Agents
- Typical cost: £50–£100+
- A broad market of trusted agents exists, many offering add-on bundles (like business banking or registered office addresses)
- Streamlined process – search your company name, pay, and go
- Price increases took effect after Companies House raised fees in May 2024
- Example: Leading agent 1st Formations charges £52.99 for a basic setup
- Look out for value-added deals, like discounted accounting or administrative services
3. Accountant-Assisted Incorporation
- Variable cost – sometimes free with a package
- Ideal for newcomers or anyone seeking a hassle-free experience
- Especially helpful if you need advice on share structures or directors’ duties
- Costs might be bundled into monthly accounting plans or charged as a one-off fee, so always ask upfront
- Why choose this route? For those with complex setups (multiple shareholders, classes of shares, specialist advice), an accountant ensures compliance and clarity from day one.
Typical Company Formation Costs 2025
| Route | Typical Fee | Timeframe | Notes |
|---|---|---|---|
| Companies House (online) | £50 | Few hours | Fastest/cheapest |
| Companies House (paper) | £71 | Up to 10 days | Long delay |
| Formation agent | £50–£100+ | 1–24 hours | Extra add-ons available |
| Accountant | Variable/free w/pkg | Fast | Advice & setup support |
The Hidden Costs: Ongoing Fees and Responsibilities
Contrary to the fears of many soon-to-be company directors, the running costs are modest:
- Annual Confirmation Statement: £34 (statutory requirement)
- Accounting Services: Highly variable – shop around, compare packages, and ensure you get the right support for your needs
- Other potential costs: Professional indemnity, business banking, or insurance depending on your field
"The only ongoing fee you’re officially obliged to pay is the annual confirmation statement – everything else is about managing your business smartly."
Standing Out: Why Work With an Accountant?
For many, having an expert to walk you through incorporation, explain director duties, and advise on vital decisions is invaluable.
Accountant benefits:
- Guided formation and hand-holding through the legal admin
- Help configuring share structures for maximum flexibility
- Immediate advice on IR35, tax, or payroll matters
And often, the incorporation is free if you’re taking their monthly services!
"A good accountant is more than a number cruncher – they’re your guide to building a sustainable, compliant, and profitable company from the start."
Smart Steps: Company Formation Cheatsheet
- Decide on your formation route (self, agent, or accountant)
- Check your company name availability
- Register with Companies House or your chosen service
- Register for Corporation Tax (if agent/accountant does not do this automatically)
- Set up business banking
- Choose accountancy and insurance support
Save This Table: At-a-Glance Costs
| Action | Cost |
|---|---|
| Incorporate (online) | £50 |
| Incorporate (paper) | £71 |
| Formation Agent | £50–£100+ |
| Annual Statement (ongoing) | £34 |
The future of business shouldn’t be locked behind high fees or endless paperwork. The UK system is designed to make entrepreneurship accessible – don’t let old myths hold you back.
Your Next Move
- Ready to set up? Compare the latest accountant offers for IT contractors and freelancers
- Unsure about IR35 or tax? Read up on Inside IR35 vs Outside IR35: The Basics
Take the leap – your limited company is only a few clicks away.
"With the right guidance and a clear view of costs, forming your UK limited company is an achievable and empowering step for any contractor."
