Setting up a limited company in the UK is still remarkably inexpensive, even given the 2024 fee rises. There are several ways to set up your own limited company. Go direct via Companies House, hire an accountant, or use a company formation agent.
Here’s a practical look at the typical costs involved in forming a company in 2025.
As you can imagine, the more “middlemen” involved in the set-up process, the more you can expect to pay.
Despite popular belief, setting up a company in the UK is surprisingly inexpensive and easy.
In the 1970s, it cost almost £300 to form a new company. In 2025, you can set up a company for around £50.
Cost comparison: different company formation routes
| Method | Typical cost | Speed | What’s included |
|---|---|---|---|
| Companies House (online) | £50 | Same day to 24 hours | Basic registration, tax registration |
| Companies House (paper form) | £71 | Several days | Manual processing only |
| Formation agent | £50–£100+ | Same day to 24 hours | Optional extras: bank accounts, address services |
| Accountant | Varies – often included | 1–2 days | Advice, share structuring, support |
a) Incorporate directly via Companies House (costs £50 or £71)
The registration fee to set up a company limited by shares is £50 if you use the Companies House web incorporation service.
The incorporation process can take up to 24 hours but usually takes only a few hours.
You can pay by credit or debit card.
It costs £71 if you submit a paper application using Form IN01, although this is likely to be a slow process, as this Companies House statement suggests:
It’s taking much longer than usual to process paper documents sent to us by post. Use our online services where possible.
If you set up your company directly with Companies House, you can automatically register your company with HMRC for Corporation Tax, and as an employer. Otherwise, you need to do this separately if you opt for b) or c).
b) Use a formation agent (typical cost from £50 – £100+)
Another route is to use an intermediary to set up a company on your behalf.
There are hundreds of formation services available online, from no-frills to more extravagant packages that even include a brass plate with your company name on it.
Most formation agents make their money by offering additional add-ons – such as business banking services – as it is hard to make money out of the formation service on its own.
You can also get discounts on accounting fees, a third-party registered address, and other administrative services.
You need to search if your proposed name is available, pay the fee, and everything should be taken care of on your behalf.
Many formation agents increased their package costs following Companies House’s fee rises on 1st May 2024.
We’ve worked with 1st Formations, a leading incorporations company, for many years now. You can set up a new company for £52.99 here.
c) Ask an accountant to form your company (variable cost)
Small business owners may prefer to set up a company via their accountants as this process is hassle-free. This makes a lot of sense for those unfamiliar with running a business.
For many, the idea of becoming a company director is fairly daunting. A specialist accountant can answer any questions about directors’ responsibilities and the formation itself.
If you’re considering issuing several classes of shares, have multiple shareholders, or need advice on how best to split your new company’s shares, using an accountant is prudent for obvious reasons.
Your accountant may even include the incorporation costs if you sign up for their monthly service.
Other accountants will apply a one-off charge rather than absorbing the costs into the standard fee.
Either way, your accountant should let you know upfront how much your company incorporation will cost.
Read this popular guide – do I need an accountant for my company? – for some more advice.
Visit our directory of specialist accountants for an initial list of service providers.
What about the ongoing costs of running a company?
Despite the preconceptions some prospective company directors may have, the ongoing overheads of running a company are very low from an ‘official’ point of view.
The only ongoing statutory cost is the £34 fee for submitting your Confirmation Statement.
The only additional expenses associated with administering the company itself are usually accountancy fees, and possibly some additional professional costs. These will vary according to the service provider you choose.
You need to take several steps when setting up a company – read 10 things you should know before forming a company.
Compare 30+ accountancy firms here
FAQs – limited company setup costs
Are there any hidden costs when using a formation agent?
Yes – some agents upsell extras like registered office services, mail forwarding, VAT registration, or banking introductions. These may not be included in the advertised price, so check what’s bundled before you pay.
If I appoint multiple shareholders, does that increase the setup cost?
No, not necessarily. The Companies House fee remains the same, but if you’re using a formation agent or accountant, they may charge more for drafting bespoke share structures or shareholder agreements.
Can I reclaim the incorporation fee as a business expense?
Yes – the company setup fee is a legitimate business expense; however, it’s treated as a capital cost, not a tax-deductible trading expense. Your company can’t claim Corporation Tax relief on the incorporation cost, but you can reimburse yourself from the company once it’s formed.
Is VAT registration included when I form a company?
Not automatically. If you use Companies House directly, VAT registration must be done separately via HMRC. Some formation agents offer it as an add-on service, usually for a small fee.
What if I want to change the company name after formation?
You can file a name change with Companies House at any time after incorporation, but it costs £8 (or £30 on paper). Consider checking variations in advance to avoid that extra admin and fee.
Can I delay trading after I’ve incorporated?
Yes – forming a company doesn’t mean you have to start trading immediately. However, once registered, you’ll still have annual filing obligations, even if the company remains dormant.
Do formation agents file the Confirmation Statement for me?
Usually not. Unless they offer ongoing company secretarial services, you’ll be responsible for filing your Confirmation Statement each year. Some offer reminders or pay-per-file services.