The £50 figure is real. Companies House charges £50 to incorporate a private limited company online, and you can have a registered company number and a certificate of incorporation within 24 hours of submitting the form. If you use a formation agent, add another £10–£50 depending on the service level. That’s it for the formation itself.
The first year of running the company is a different number.
When you account for the actual costs of keeping a UK limited company compliant, banked, and functional through its first 12 months, most non-resident founders spend somewhere between £800 and £3,500 depending on how complex their setup is. Here’s where that goes.
Registered address: £50–£200/year
A UK limited company must have a registered address in the UK an address where official correspondence from Companies House and HMRC is received and forwarded. You can’t use a PO box, and unless you have a genuine UK physical address you control, you need a registered address service.
Registered address services typically run £50–£150 per year for a straightforward mail-forwarding arrangement. Some formation agents bundle this with their formation fee for the first year, then charge separately from year two. The London postcode premium is real a registered address in EC1 or W1 costs more than one in a regional city, and the premium serves no legal purpose if you’re operating entirely remotely. A registered address in Manchester or Leeds at £50/year works identically.
If you also need a correspondence address (separate from your registered address, used for day-to-day business mail rather than official filings), that’s an additional cost. Many service providers offer both together for £100–£200 combined.
Accountant: £500–£1,500/year
This is the biggest variable in the first-year cost range, and the one most people underestimate.
A UK limited company is required to file annual accounts with Companies House and a corporation tax return with HMRC every year, regardless of whether it traded or generated any income. A dormant company can file dormant accounts, which are simpler, but it still files. An active company needs accounts prepared to UK GAAP standard (usually FRS 105 or FRS 102 1A for small companies), a corporation tax computation, and a CT600 return.
An online-only accountant handling a micro-company with simple accounts one director, one currency, no VAT, no employees typically charges £500–£800/year for annual accounts and the CT600. Add VAT registration and quarterly VAT returns and you’re looking at £800–£1,200. Add payroll for a director’s salary (some non-resident founders pay themselves a nominal UK salary alongside dividends for pension contribution reasons) and the bill moves to £1,000–£1,500.
Mid-tier UK accountancy firms handling the same work charge more, sometimes significantly more, but also offer more hands-on support for founders unfamiliar with UK tax obligations. The cheapest option isn’t always right if you’re navigating UK corporation tax for the first time from outside the country.
One thing that catches founders out: UK accountants typically charge separately for ad hoc advice. Annual accounts is a fixed-price engagement; “can you explain how the dividend tax credit works for my situation” is usually billed in addition. Get clarity on what’s included before signing an engagement letter.
Business bank account: £0–£300/year
Opening a UK business bank account is the step that’s gotten harder since 2020, not easier.
High street banks Barclays, HSBC, NatWest, Lloyds all technically offer business accounts for UK limited companies. In practice, most will not open an account for a company with no UK-resident director, no UK trading address, and no UK customer base. Applications from non-resident founders are routinely declined or stuck in extended KYC review for months.
The working solution for most non-resident founders is an e-money institution: Wise Business, Revolut Business, or Airwallex. These are not banks; deposits aren’t FSCS-protected in the same way, but they handle invoicing, multi-currency accounts, and international transfers competently, and their KYC processes are designed for internationally mobile founders. Wise Business charges no monthly fee but takes a small percentage on currency conversions. Revolut Business charges £25/month for a plan with meaningful features.
If you need a sort code and account number that looks like a traditional UK bank account (some enterprise clients require this), Wise Business provides UK bank details. If you need to hold GBP, USD, and EUR in the same account and convert between them without international wire fees, Wise or Airwallex are better than any high street bank even if you could get one.
Budget £0–£300/year depending on whether you use a free tier, a paid plan, or manage to open a traditional bank account.
Confirmation statement: £34/year
Every UK limited company files a confirmation statement with Companies House once a year, confirming that the information on the public register directors, shareholders, registered address, SIC code is accurate. The Companies House fee is £34 if filed online. This is a fixed, non-negotiable cost. Miss it and Companies House begins the process of striking the company off the register.
If you use a formation agent or accountant who handles this for you, they may charge a service fee on top of the Companies House fee, typically £20–£50. It’s worth clarifying whether your accountant’s annual fee includes the confirmation statement or charges it separately.
VAT registration and returns: £0 or variable
VAT registration is mandatory once your UK-taxable turnover crosses £90,000 in a rolling 12-month period (the threshold as of April 2024). Below that, it’s optional.
For B2B services sold to non-UK clients, the reverse charge mechanism often means UK VAT doesn’t apply to your sales even if you’re registered but you may still want to register voluntarily to reclaim VAT on UK expenses (software subscriptions, accountancy fees, etc.). The cost calculation depends on your expense base.
For B2C sales or sales to UK businesses, VAT registration below the threshold can be competitive disadvantage your prices are 20% higher to UK VAT-registered customers who can’t reclaim input VAT from an unregistered supplier. Get advice on this specific to your customer mix rather than applying a general rule.
Software and tools: £100–£400/year
At minimum, you need some form of bookkeeping. HMRC’s Making Tax Digital initiative is progressively requiring digital records for more businesses; even before any mandate, keeping books in software makes account preparation faster and cheaper (accountants charge more to reconstruct records from a spreadsheet).
Xero, QuickBooks, and FreeAgent are the UK accountants’ preferred platforms. Xero’s Starter plan runs £15/month (£180/year); the Growing plan is £30/month. FreeAgent is free if you bank with NatWest Group, otherwise £19/month. QuickBooks Simple Start is £14/month.
If your accountant uses one of these and you use another, expect friction. Ask your accountant which platform they prefer before subscribing.
What £800 vs £3,500 actually means in practice
The £800 scenario: a solo founder, no UK employees, one currency, B2B services to non-UK clients, no VAT registration, Wise Business account (no monthly fee), accountant on a basic annual package, registered address at £50/year. Realistic if your business is genuinely simple.
The £3,500 scenario: a founder with employees or contractors, UK B2C sales requiring VAT registration and quarterly returns, a formation agent who charged for extras during setup, an accountant who charges separately for each advisory call, a Revolut Business plan, and a separate registered address and correspondence address. Still cheaper than many offshore jurisdictions for an equivalent amount of substance.
The number that surprises most founders is accountancy. People expect to pay £100–£200 for year-end accounts that’s roughly what a personal tax return costs in India or Singapore and discover that UK Business corporate accounting for even a micro-company starts at £500. This isn’t a rip-off; UK GAAP accounts, a proper CT600 with capital allowances and loan relationships if applicable, and quarterly VAT returns represent a meaningful amount of work. But it’s worth knowing in advance rather than discovering in November when the invoice arrives.
What isn’t in this number
The £800–£3,500 range doesn’t include your home country’s compliance costs India ODI filing, UAE tax registration if applicable, US FBAR or Form 5471 if you’re a US person. Those are real costs that stack on top, and they’re often more significant than the UK compliance costs for founders based in high-compliance home jurisdictions.
It also doesn’t include the time cost of managing a foreign entity. Opening bank accounts, chasing accountants for filing confirmations, keeping track of Companies House deadlines none of this is difficult, but it takes 10–15 hours a year of attention, minimum, for a simple company. Factor that in if your time has an opportunity cost.
The £50 Companies House fee is not the budget. It’s the entry ticket. Plan for the actual first-year number, pick your accountant before you incorporate rather than after, and you’ll find the UK Ltd is genuinely one of the simpler and cheaper corporate structures to maintain at the small-company level; it just doesn’t cost what the formation headline suggests.
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