Adjust to match your actual or estimated costs. Defaults are typical UK averages.
Annual overhead breakdown
Frequently asked questions
The core unavoidable costs include the Companies House confirmation statement fee (£34 per year online), accountancy fees (typically £800 to £2,500 per year for a small company), and payroll software or bureau costs if you run PAYE. Employer NI applies if your salary exceeds £5,000 per year, and you will also need business insurance.
Legally you do not, but in practice almost all small limited companies use an accountant. A limited company must file statutory accounts prepared under UK GAAP or FRS 105 (micro-entity) accounting standards, submit a corporation tax return (CT600), and run PAYE for the director salary. Errors can result in penalties, so professional preparation is strongly recommended.
Traditional high street banks typically charge £5 to £10 per month for a business current account, plus transaction fees. Challenger banks such as Starling, Monzo Business, and Tide offer free or low-cost accounts with fewer features. Most lenders and many suppliers expect limited companies to have a dedicated business account separate from personal finances.
Employers' liability insurance is legally required if you have any employees (including yourself if you are a paid director). Professional indemnity insurance is essential for consultants, advisers, and service businesses. Public liability insurance is advisable if you interact with clients or the public. Directors and officers insurance protects directors personally.
Most running costs are fully deductible against corporation tax. This includes accountancy fees, bank charges, insurance, software subscriptions, and professional memberships. Your director salary is deductible as an employment cost. Dividends are not deductible as they are paid from post-tax profits. The effective corporation tax saving is 19% to 25% of allowable costs.