Changes to Companies House Fees

Following a recent government announcement, there are going to be changes to Companies House fees coming on May 1st 2024. These changes mean there’ll be an increase in the cost of starting a business in the UK. Below, you’ll find all the necessary information regarding the changes to the fees, and how they might affect your plans to start your own business, as well as some insight from our expert team.

Understanding the recent changes to Companies House fees

Companies House is increasing its fees for a range of business necessities, which includes an increase in company incorporation fees. These fees are increasing for all types of businesses and all methods of incorporation. Specifically, the cost to incorporate a company digitally is rising from £12 to £50, an increase of more than 300%. However, this isn’t about the government trying to maximise its own profits, as explained by our Start-Up Advisor, Joe.“It’s important to remember that Companies House doesn’t make any money by increasing its fees. It’s justifying this increase by spending more money protecting the integrity of the public register. If these changes lead to more accurate information on Companies House, there will be a decrease in fraud and the overall benefit to the reputation of UK companies. Having said this, the fee increases make starting a company, which is already expensive, even more so, and may put some people off making this leap.

“Any increase in fees is clearly unfortunate for new business owners and hits small businesses the hardest. However, if the increased revenue is used wisely by Companies House, it will mean a more robust public register of information, which will give greater confidence to UK businesses.”

What does this mean for SUAZ?

At SUAZ, we’re proud to offer free company formations, so if you’re looking to start your own business, choosing us as your company formations agent means you won’t have to worry about the current £12 incorporation fee. We’re committed to offering you the opportunity to start your own business with our support, and the latest announcement regarding the changes to Companies House fees doesn’t affect what we can offer today. It would be disingenuous of us to guarantee that we will continue to offer the free product beyond May - this news was announced only last week and we would be wary of any agent that is already promising to offer free formations regardless of the fee increase. We know that any business, whether yours or ours, is built on careful decisions. As soon as we decide on the future of our free company formations product, we’ll communicate it to you clearly. The best way to keep up to date with the rapidly developing news is to join our mailing list.

What does this mean for other company formations agents?

It’s hard to know exactly how the changes to Companies House fees will change the landscape for company formation agents. The increase in fees will likely make it harder for everyone to offer free company formations in the future, and it really is a good incentive to take advantage of our free company formations offer while we can guarantee it. 

So, how much does it cost to form a limited company now?

The changes to the Companies House fees come off the back of legislation passed in Parliament in October 2023, namely the Economic Crime and Corporate Transparency Act, which received Royal Assent on October 26. Designed to allow Companies House to play a much greater role in disrupting economic crime, this legislation does affect how small businesses will interact with Companies House. This includes changes to the way accounts are reported and how directors are identified, and greater powers to query information. Companies House is set up to take a much more hands-on approach to vetting and protecting the public register. 

Companies House fees work on a cost recovery basis, with fees covering the costs of services delivered. With an increase in the scope of work for Companies House, the change to the fees reflects this. 

The table below highlights the increase in fees in the areas that may be relevant to small businesses - for a breakdown of every planned change in Companies House fees, check out the Companies House website.

SUAZ’s commitment to free company formations

Our free company formations product is important to us, and our mission hasn’t changed due to this news. Our aims are still to:

• Take the stress away from starting a new business

• Give the new businesses we work with the best possible chance of success

• Support small businesses like yours with the best possible start

We believe that the best start we can offer a new business is the Business Support Club - a unique marketplace that provides you with access to vetted suppliers to help you grow your idea into a business. By signing up to the Business Support Club via the free company formations product on SUAZ, you’re giving your business the best possible chance of success right from day one. As a member of the Business Support Club, you’re putting your trust in us and our suppliers; so it’s only right that we absorb the first cost of your business journey - the incorporation fee. 

Adapting to change: empowering entrepreneurs

Changes to Companies House fees are not easy to read as a budding entrepreneur - but business has always been about adapting to a changing environment. 

On one hand, the knowledge that fees will rise in the future means there’s never been a better time to start your own business than today, beating the increase! On the other hand, you may not want to be rushed. These changes aren’t ideal, but perhaps they’re the catalyst you need to make your dreams of owning your own business a reality.

Our Knowledge Base is packed full of information on starting companies in a range of industries and sectors, and it’s important to do the correct research before making any decisions. Beyond our own blog, we’d encourage you to sign up for the Companies House newsletter for up-to-the-minute information on any further changes in Companies House fees.

Whatever path you choose to take, SUAZ and BSC are here to support you every step of the way. Our Start-Up Advisor, Joe, has the following tips for entrepreneurs following the Companies House announcement.“We know that starting a business is already expensive and increased statutory fees aren’t exactly going to help. We’ve always promoted starting businesses with an emphasis on keeping costs down and this is getting more and more important. Here are some key tips to keep costs down:

• Don’t buy too much stock

It can be exciting to buy stock, but buying too much can act like an anchor on your business, weighing on cashflow and meaning your budget is all tied up.

• Buy second-hand or leased equipment

Buying older equipment can be significantly cheaper than buying new. Or consider leasing initially until you have a reliable income.

• Negotiate everything

Lots of business purchases are negotiable. As the saying goes, if you don’t ask you don’t get. Always ask for a discount!

• Use Business Support Club

Using BSC will allow you to compare suppliers and find the best value products and services for your new business.

At SUAZ, the biggest mistake we see new business owners make is overspending when they start their company without proving the concept first. We highly recommend proving your idea works on a budget, then scaling up when you have demonstrated demand.”

The changes to the Companies House fees don’t need to be the end of your entrepreneurial aspirations. With SUAZ and BSC on your side, they could be the moment you decide to make the best decision of your life and take advantage of a free company formation product that you can trust, while it’s still there!