The Real Cost of Setting Up a UK Ltd: What Low-Price Formation Offers Hide

The Price You See Is Not the Price You Pay

UK company formation is a commoditised product with a visible sticker price and a long tail of ongoing obligations. The formation fee buys you one thing: the act of filing with Companies House.

Everything that follows is separate, recurring, and — for a company with a December year-end — falls due at roughly six-month intervals for the rest of its life.

This guide sets out what a UK Ltd genuinely costs, so you can compare providers on total cost of ownership rather than headline price.

[!NOTE] We sell formation services. We have therefore set out our own costs as well as the industry's, and we have tried to be honest about where we are more expensive than the cheapest operators.

Part One: The Formation Fee Itself

Every formation includes one statutory cost that cannot be avoided:

Companies House reduced the online fee to £50 in May 2023. If a provider is still quoting the old £50 figure as their "government fee included" while charging £71, or if their fee structure is unclear, ask.

Part Two: First-Year Running Costs

These are the costs that surprise people. All are recurring annually, not one-off.

Registered Office Address

Legally mandatory, every year. This is the single most common hidden cost.

The free Companies House address cannot be used as a director's service address, and mail is not forwarded. It also appears on the public register. See our registered office guide for what your address must satisfy.

Director Service Address

Optional but strongly advisable if your home address is not in the UK or you want it off the public register. Usually bundled with the registered office, sometimes charged separately at £30–£60/yr.

Accounting and Annual Accounts

A UK Ltd must file accounts at Companies House every year, whether dormant or trading.

Small companies claiming audit exemption must meet two of three thresholds — turnover ≤£10.2m, balance sheet ≤£5.1m, ≤50 employees — and state the exemption claim explicitly on the balance sheet.

Corporation Tax Registration

Free. But if you are non-resident, forming a company that generates UK-sourced income usually requires ** HMRC registration for Corporation Tax** within 3 months of starting activity, and often VAT registration as well. Both are free to register, both carry penalties if late.

Confirmation Statement (CS01)

Filed once every 12 months, confirming directors, PSC and registered office.

Part Three: Recurring Costs That Founders Miss

Banking

Not a UK company cost per se, but the practical reality is that non-residents cannot open a traditional UK account. Wise Business, Revolut, Airwallex and Mercury are the realistic options, and their fees should be factored into your model.

Director and Shareholder Costs

• Multiple directors: each additional director must be verified and recorded
• ID verification under ECCTA: required for every director and PSC from 2026. ACSPs may charge for verification.
• Right to work / standard verification may be required in addition

Professional Fees

Some activities need a professional rather than an online form:

What Formation Providers Differ On

These are the levers a low-cost provider pulls.

Free registered office. Offer included "for the first year". Renewal is a separate, material expense.

Excess services marked "optional". Same-day incorporation is only necessary if you have a genuine deadline — a tender response, a marketplace cut-off, a grant window. Paying a premium for it otherwise is waste.

Companies House fee marked "from". Some providers quote "from £50" as their headline while excluding the government fee entirely. Check the fee structure before comparing.

No ACSP-registered agent. Under ECCTA, directors and PSC details must be verified by an ACSP. Non-UK-resident formation is not reliably available through the free Companies House service.

VAT not included. If the quote excludes VAT, add 20% before comparing.

What We Charge, Stated Plainly

Our packages start at £119.99 including the Companies House fee, and:

• Starter — formation, digital incorporation documents, name check, ACSP identity verification, banking guidance. You supply your own registered office address from year two.
• Standard Plus (£189.99) — everything in Starter plus a London registered office and director service address for 12 months, plus banking fast-track.
• Enterprise Elite (£299.99) — everything in Standard Plus plus a 2-year address, virtual office, 020 number, assisted banking and managed annual compliance.

Our first-year running costs after formation are £0 for Starter, or £0–£150 for Standard Plus / Enterprise Elite depending on whether you renew the address with us. Formation is also VAT-exempt, which is worth noting: that is why there is no VAT line.

Simple First-Year Total

The cheapest route is genuinely cheap — if you can handle the process yourself and have an address you can use. The mid-range is about not making mistakes on a filing Companies House will reject.

Where the Money Actually Goes Over Five Years

For a dormant or minimally trading company, a realistic five-year cost:

Most of the spread is whether you do the work yourself. Every task below can be done by hand or bought:

• File accounts at Companies House
• File the CS01
• Renew the registered office
• Register for Corporation Tax
• Keep records

None of these require a professional. Some require one if you get them wrong.

Checklist Before You Pay Anyone

• Is the Companies House fee included, and is it £50 not £71?
• Is VAT applicable to the service, and is it included?
• Is the registered office included for year 1 only or year 1 and renewal?
• Does the agent hold current ACSP registration?
• Is ACSP identity verification for every director and PSC included?
• What happens if Companies House rejects the filing — is resubmission free?
• Can you supply your own registered office, or is the provider's mandatory?
• Is there a "from" price, and what does the typical UK Ltd actually pay?

Compare Packages

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Related Guides

• UK Corporation Tax 2026 — what you pay once you're trading
• Dormant UK Companies: Annual Compliance — how to keep costs minimal while dormant
• UK Registered Office Address Requirements 2026 — address options and costs
• What Happens After You Register a Company? — the full post-formation roadmap
• UK VAT Registration Threshold 2026 — when VAT enters the picture

Disclosure: UK LTD Registration may receive a commission if you sign up through our links. This helps us keep our guides free and up to date — at no extra cost to you.