How Much It Costs to Set Up and Run a UK Limited Company in 2026, Full Cost Breakdown for Residents and Non‑residents

Updated October 2026. The cost of company formation UK founders face in 2026 is shaped by the Companies House fee increases that took effect on 1 February 2026 under the Economic Crime and Corporate Transparency (ECCT) Act 2023. For a UK-resident micro company, realistic first-year budgets start from roughly £150–£500. A small trading company with staff typically runs to £1,500–£4,000 in the first year, while an overseas parent opening a UK subsidiary should budget £2,000–£6,000+ once notarisation, legalisation and banking frictions are counted. This guide models the cost of company formation UK incorporation realistically, with low/typical/high bands and primary-source citations throughout.

Introduction, what this guide covers and key 2026 update

This landing page provides an impartial, lawyer-verified breakdown of the cost of company formation uk entrepreneurs encounter, covering both the one-off cost of incorporating a private limited company and the ongoing cost of running it. The headline 2026 change is the revised Companies House fee schedule, introduced to fund the new identity verification and anti-money-laundering (AML) powers created by the Economic Crime and Corporate Transparency Act 2023. These reforms raise the baseline cost of company formation UK businesses must plan for and add new verification steps that particularly affect non-residents.

Because online summaries and AI overviews frequently repeat vendor-specific or outdated figures (headline offers like “£12.99” rarely reflect a realistic first-year budget), this guide anchors every figure to official Companies House and HMRC guidance, dated to 2026.

Immediate headline, first-year ballpark ranges for three typical scenarios

• Resident micro-company (solo director): approximately £150–£500 in year one, including the Companies House fee, a basic registered office and simple accounting.
• Resident small trading company (with staff): approximately £1,500–£4,000 in year one, covering accounting, payroll, VAT compliance and a professional registered office.
• Overseas parent opening a UK subsidiary: approximately £2,000–£6,000+ in year one, driven by notarisation, legalisation, translation, nominee/registered office services and banking delays.

Quick cost summary, one-page snapshot and 2026 Companies House fee table

The single largest predictable element of the cost of company formation UK founders pay is the Companies House incorporation fee. Everything else, formation agent or solicitor fees, registered office, accounting, banking and verification, layers on top. The table below sets out the key Companies House fees effective 1 February 2026.

Fee assumptions & what is and is not included

All figures are in GBP. Companies House statutory fees are not subject to VAT, but professional and agent services generally are (VAT is shown excluded unless stated). The table assumes standard, non-expedited service unless a same-day option is listed.

For the full historic comparison and downloadable schedule, see our deep-dive on Companies House 2026 fees (detailed table).

How to set up a UK limited company, step-by-step process and where costs arise

Understanding the process makes the cost of company formation UK founders pay far more predictable. Each stage below indicates where money is spent and how to keep costs lean without cutting legal corners. The GOV.UK guide to setting up a limited company summarises the statutory process; the detail below adds cost context.

1. Step 1, Choose company type and name. Most founders register a private company limited by shares. Name availability is free to check on the Companies House register; there is no separate “reservation” fee, the name is secured on successful incorporation. Costs here are typically nil unless you pay for brand/trademark clearance, which is a separate (optional) exercise and not part of the core cost of company formation UK founders must incur.

2. Step 2, Prepare incorporation documents and articles. You can adopt the free model articles provided by Companies House (£0), buy a paid template pack, or instruct a solicitor to draft bespoke articles and a shareholders’ agreement. DIY model articles suit simple single-director companies; bespoke drafting (typically £300–£1,500+) is sensible where there are multiple shareholders, investment terms or unusual share classes.

3. Step 3, Verify identity and address. Under the ECCT Act 2023, directors, people with significant control (PSCs) and those filing are subject to identity verification. For UK residents this is usually straightforward and low-cost. For overseas founders, verification often requires certified or notarised documents, adding cost and time (see the non-resident section below).

4. Step 4, File with Companies House. Online incorporation costs £50 and is usually processed within 24 hours; postal filing costs £71 and is slower; same-day software filing costs £78 where offered. Choosing the online route is the single easiest way to control the cost of company formation UK incorporation.

5. Step 5, Post-incorporation notifications. After incorporation you must notify HMRC and register for Corporation Tax (free), register for VAT if required, set up PAYE if you employ staff, and keep statutory registers. The confirmation statement (£34 online annually) is a recurring obligation under the Companies Act 2006.

6. Step 6, Open a bank account and set up accounting/payroll. Account opening is typically free for residents but involves KYC checks; fintech and traditional accounts carry varying monthly fees. Accounting and payroll setup costs depend on the provider and complexity.

7. Step 7, Registered office and ongoing compliance set-up. You need a registered office address that is an “appropriate address” under the ECCT reforms (a PO box alone is not acceptable). Using a professional provider adds an annual fee but protects privacy and ensures statutory mail is handled correctly.

Comparison tables, formation pathways and the cost of company formation UK by route

The route you choose materially changes the cost of company formation UK founders pay, trading off price against speed, quality and legal assurance.

Table A, Formation pathway comparison

Table B, Resident vs non-resident formation cost comparison

For a dedicated non-resident checklist and provider comparison, see our guide to non-resident company formation, UK, and compare routes in formation agents vs solicitors, hire wisely.

Key requirements & eligibility, who can form a UK company

Before weighing the cost of company formation UK incorporation, it is essential to confirm eligibility. Most people, resident or not, can form a UK limited company, but the statutory and verification requirements determine how much you will ultimately spend.

Minimum statutory requirements

Under the Companies Act 2006, a private company limited by shares must have:

• At least one director: a natural person aged 16 or over; there is no UK-residency requirement for directors.
• A registered office: a physical UK address that is an “appropriate address” able to receive and acknowledge statutory mail.
• Articles of association: either the free model articles or bespoke articles.
• A registered company name: unique and compliant with naming rules.
• A share structure: at least one shareholder and one issued share; there is no minimum capital requirement, so a company can be formed with £1 of share capital.

These core requirements mean the unavoidable statutory cost of company formation UK incorporation is modest, the £50 online fee, with everything else being a service choice.

Non-resident specific eligibility issues

Overseas founders can be directors and shareholders, but they must satisfy Companies House identity verification, now reinforced by the ECCT Act. Where documents originate abroad, Companies House and service providers may require certified copies, notarisation or legalisation (an apostille). A UK registered office is always mandatory, so non-residents almost always need a UK address provider. These factors are the main reasons the cost of company formation UK non-residents pay exceeds that of residents.

One-off formation costs, detailed line items and typical price bands

The following line items make up the one-off cost of company formation UK founders incur. Each is shown with indicative low/typical/high bands and the assumptions behind them.

Companies House incorporation fees

The statutory charge is £50 online, £71 by post, or £78 for same-day software filing (see the 2026 fee table above). This is the only mandatory government fee to incorporate and is the anchor of any realistic budget.

Formation agent or solicitor fees

Formation agents and fintech providers typically charge £10–£150 on top of the statutory fee, often bundling a registered office or digital mailroom. Solicitors charge more, commonly £300–£1,500+, but provide bespoke articles, verified share structures and legal advice. The right choice depends on complexity: simple single-director companies rarely need a solicitor, while investment-ready or multi-shareholder structures benefit from legal drafting.

Identity verification, notarisation & legalisation (overseas)

For residents, verification is typically low-cost or included. Overseas founders should budget £50–£300+ per notarised document, plus legalisation/apostille fees where a foreign public document must be recognised. These costs recur per document, so founders with multiple directors or PSCs can see this line multiply.

Registered office set-up (first year)

A professional registered office for the first year typically costs £30–£150 for residents and £60–£300 for non-residents, reflecting the heavier compliance handling and address requirements. See registered office services, UK guide for provider price bands.

Bank account opening and associated compliance fees

Opening a business bank account is usually free for residents, though KYC checks apply. Non-residents face longer onboarding and may rely on fintech providers, where monthly fees and transaction charges apply. Some providers charge small opening or verification fees.

Certified copies, company seal, certified translations

Optional extras include certified copies of incorporation documents (£10–£50 each), a company seal (£20–£40, rarely required), and certified translations (£20–£60 per page) for overseas founders. None is mandatory for a standard UK formation, so these should only be added to the cost of company formation UK budget if genuinely needed.

Annual running costs, realistic budgets and what to budget for

Incorporation is only the start. The ongoing cost of company formation UK companies carry each year is usually larger than the one-off fee, driven by compliance filings, accounting and (where relevant) payroll and VAT. Below are the main recurring line items with low/typical/high annual bands.

Mandatory filings and fees

Every company must file an annual confirmation statement (£34 online) and annual accounts, and submit a Corporation Tax return. The confirmation statement is a Companies House fee; accounts and tax returns are usually prepared by an accountant. Agent/accountant handling of these core filings typically costs £150–£800 per year for a simple company, depending on whether you do your own bookkeeping.

Accounting & bookkeeping costs

Accounting is the largest variable in annual running costs:

• Dormant / very simple company: £150–£400 per year for annual accounts and a confirmation statement.
• Small trading company: £600–£1,500 per year covering bookkeeping, annual accounts and the Corporation Tax return.
• Higher-turnover or VAT-registered company: £1,500–£4,000+ per year including quarterly VAT returns, monthly bookkeeping and payroll.

These bands assume a UK accountant, standard complexity and no significant catch-up work. See accountant & bookkeeping cost models for scenario-based pricing.

Registered office renewal, registered agent fees, company secretarial services

Registered office renewal typically costs £30–£150 annually (more for non-residents). Optional company secretarial services, maintaining registers, handling filings and reminders, add £100–£500 per year, useful where founders want to outsource governance.

Payroll & PAYE costs, employer NIC, workplace pensions admin

If you employ staff, PAYE setup is free with HMRC, but payroll software or a provider typically costs £5–£25 per employee per month. Employers also pay employer National Insurance contributions on wages and must enrol eligible staff in a workplace pension, which carries administrative overhead. Budget £300–£1,200+ per year for payroll administration depending on headcount.

Banking fees, foreign-exchange and cross-border costs for non-residents

Business banking fees vary widely. Non-residents and companies trading internationally also incur foreign-exchange spreads and cross-border transaction fees, which can quietly add hundreds of pounds a year. These costs should be built into the annual cost of company formation UK non-residents plan for.

Compliance overheads from ECCT-related checks

The ECCT Act 2023 introduced enhanced identity verification and AML measures. In practice this means additional verification steps at incorporation and on certain filings, longer onboarding at banks and providers, and in some cases re-verification. Industry observers expect verification-related administration to add modest but recurring time and cost, particularly for overseas directors.

Non-resident specifics, additional costs, delays and practical workarounds

Overseas founders face the highest cost of company formation UK incorporation, mostly because of document handling and banking friction rather than the statutory fee, which is identical to residents.

Notarisation, legalisation and translation costs

Foreign identity and corporate documents often need notarisation and legalisation (apostille) to be accepted, costing £50–£300+ per document, plus £20–£60 per page for certified translations where documents are not in English.

Bank account access, fees and UK-based providers

Access to a UK business bank account is the most common pain point for non-residents. Traditional banks may decline accounts where directors are overseas; fintech alternatives are more accessible but charge monthly fees and may apply transaction limits. KYC timelines can run from days to several weeks.

Nominee services and registered office providers

Nominee director or shareholder services are sometimes used by overseas founders, costing £150–£500+ annually. These must be used transparently and in compliance with PSC disclosure rules, the ECCT reforms increase scrutiny of beneficial ownership, so nominee arrangements must never obscure the true controllers.

VAT/PAYE registration complexities for overseas directors and branches

Overseas founders registering for VAT or PAYE, or establishing a UK branch, may face additional documentation and processing. The overseas-establishment registration fee is £124. See VAT & payroll compliance costs for detail.

Practical cost models, worked examples for budgeting

These worked examples illustrate the realistic cost of company formation UK founders should budget for in year one. Each assumes online Companies House filing and no expedited service.

Scenario 1, Solo director (UK resident) micro trading company

Incorporation £50; basic registered office £30–£100; simple annual accounts and confirmation statement £150–£350. First-year total: ~£230–£500.

Scenario 2, UK small trading company with staff

Incorporation £50; professional registered office £100; accounting and VAT returns £1,000–£2,500; payroll administration £300–£800; confirmation statement £34. First-year total: ~£1,500–£3,500.

Scenario 3, Overseas parent opening UK subsidiary

Incorporation £50; notarisation/legalisation/translation £300–£800; registered office and nominee/secretarial £400–£1,000; accounting and VAT £1,500–£3,000; banking and FX £200–£600. First-year total: ~£2,500–£6,000+.

Next steps & further resources

To plan the full cost of company formation UK incorporation for your situation, explore the cluster resources: the Companies House 2026 fees (detailed table) deep-dive, registered office services, UK guide, accountant & bookkeeping cost models, non-resident company formation, UK, VAT & payroll compliance costs, and formation agents vs solicitors, hire wisely. A downloadable budgeting calculator is planned to help you estimate first-year and ongoing costs.

Sources

• Companies House: gov.uk/government/organisations/companies-house and Companies House fees guidance
• Economic Crime and Corporate Transparency Act 2023: legislation.gov.uk/ukpga/2023/56/contents
• Companies Act 2006: legislation.gov.uk/ukpga/2006/46/contents
• HMRC, Corporation Tax: gov.uk/corporation-tax
• HMRC, VAT registration: gov.uk/vat-registration
• HMRC, PAYE for employers: gov.uk/paye-for-employers
• GOV.UK, Set up a limited company: gov.uk/limited-company-formation