Forming a limited company in the UK is one of the most strategic decisions an entrepreneur can make. With 2025 underway, it’s important to understand the current cost landscape, as it has shifted slightly due to inflation, professional service adjustments, and updated government guidelines.
This guide takes you through every cost you might encounter when forming a limited company—from the mandatory registration fee to hidden ongoing costs many forget. If you’re planning to start a business in the UK this year, read this 2025 cost breakdown before taking the leap.
What Is the First Legal Step in Forming a Limited Company?
Companies House – Your Starting Point
In the UK, every limited company must register with Companies House, the official government body for company incorporation. This step is non-negotiable and is the legal starting point for your business.
You can register your company in two ways:
| Registration Method | Cost in 2025 | Processing Time |
| Online (gov.uk) | £12 | Within 24 hours |
| Postal application | £40 | Up to 10 working days |
Online registration continues to be the fastest and cheapest option in 2025, suitable for most business types.
How Much Does It Cost to Set Up a Limited Company UK?
The actual cost to set up a limited company depends on the approach you take. At the lowest end, it’s just £12. But if you choose a more professional setup with additional services, you may spend more.
| Cost Category | Estimated Cost in 2025 | Notes |
| Companies House (online) | £12 | Standard direct registration |
| Formation agent (basic package) | £15–£30 | Includes certificate, digital documents |
| Premium formation package | £50–£150+ | Includes registered address, compliance support |
| Registered office address | £12–£30/year | Required if not using home address |
| Accountant setup consultation | £50–£200 (one-time) | Optional but helpful for tax structure advice |
| Domain and business email | £10–£50/year | For professional branding |
| Business bank account | Free–£10/month | Some banks offer 12–18 months free |
Minimum DIY Cost: £12
Average Full-Service Cost: £100–£250
If you’re confident in handling legal documents and want a lean setup, you can stick to the lower range. If you’re looking for professional presentation and ongoing support, budget on the higher end.
Is a Company Formation Agent Necessary in 2025?
What Do Agents Offer That You Can’t Do Yourself?
Formation agents aren’t mandatory, but they offer bundled services that save time and ensure compliance. Many packages now include:
- VAT and PAYE registration assistance
- Custom articles of association
- Business phone numbers and digital mailboxes
- Free support for the first few months
These services are useful if you’re unfamiliar with business registration or if you want to project a more professional image from the start.
If you opt to register directly via Companies House, ensure that your documents—such as the memorandum and articles of association—are properly formatted and legally accurate.
What Ongoing Costs Should You Be Prepared For?
Yearly Legal and Operational Responsibilities
Setting up a limited company is just the first step. There are several ongoing responsibilities, many of which involve regular costs.
| Ongoing Requirement | Cost in 2025 | Frequency |
| Confirmation statement filing | £13 (online) | Annual |
| Corporation tax return filing | Usually included in the accountant’s fees | Annual |
| Annual accounts submission | No fee if DIY, else accountant fees apply | Annual |
| Accountant (monthly) | £25–£100+ | Monthly (optional) |
| Business insurance | From £10/month | Depends on business |
| Accounting software (e.g., Xero) | £10–£30/month | Optional but helpful |
Failing to meet filing deadlines can result in penalties ranging from £150 to over £1,500, so ongoing financial planning is essential.
Can You Run a Limited Company from Home?
Home-Based Business Considerations
Yes, you can legally run a limited company from your residential address. However, many business owners opt for a registered office address service to keep their personal location private.
This service is available for as little as £12–£30 per year, and it’s highly recommended for those concerned about privacy or image.
Should You Hire an Accountant at the Setup Stage?
When Is Professional Help Worth the Investment?
An accountant isn’t required to register your company, but it’s advisable to consult one during setup if:
- You’re unfamiliar with UK tax regulations
- You want to structure your shares for investors or co-founders
- You need help with VAT, PAYE, or Corporation Tax
Accountants can charge a one-off fee of £50–£200 for setup advice or offer monthly services to handle bookkeeping and compliance.
What Is the Total Realistic Budget to Form a Limited Company in 2025?
Depending on your route, here’s a breakdown of typical costs:
| Setup Route | Total Estimated Cost |
| DIY (minimal) | £12–£50 |
| With a basic formation agent | £50–£100 |
| Full-service setup | £100–£250+ |
Each option serves a different need. If cost-saving is your goal, registering directly is your best bet. If image, support, and time-saving matter more, professional services are worth the investment.
Conclusion: Is Forming a Limited Company in 2025 Expensive?
Forming a limited company in the UK in 2025 is still incredibly affordable, especially when compared to other business models and countries. If you’re tight on budget and comfortable navigating government processes, you can start with just £12.
However, most UK entrepreneurs choose to invest between £100 and £250 to ensure their business starts on a strong legal and professional footing. With proper planning, this one-time cost can unlock long-term tax benefits, legal protection, and brand value.
FAQs: Common Questions About Setting Up a Limited Company in the UK
Can I register a limited company by myself in 2025?
Yes, it costs just £12 to register online via Companies House. No external help is required unless you need assistance.
Do I need to open a business bank account?
Yes. It is a legal requirement to separate personal and company finances in a limited company structure.
Are there monthly costs after forming the company?
Yes, such as accounting software, insurance, and possibly accountant fees. These are not mandatory but are often necessary for smooth operations.
What if I miss a filing deadline?
You’ll face financial penalties starting from £150. Repeated delays can also damage your business’s credibility.
