How Companies House Price Increases Affect Small Businesses

27 March 2024 – Starting 1 May 2024, Companies House will increase its fees for most of its filing and registration services.

The change comes after an annual review of the fees and the new legislation for major company law reforms.

The Companies House price increases will fund the changes to implement the Economic Crime and Transparency Act 2023. The Companies House will have no choice but to invest in new systems and skills to enact this new law.

As the government adopts the ‘cost recovery basis”, the significantly increased fees will cover the cost of the new and old services they provide.

You can check further information on reviewing Companies House fees here.

Who will be affected by the Companies House price increases?

All companies registered under Companies House will be subjected to the new fees. But it will also affect anyone wanting to register a new business in the UK from 1 May onwards.

What are the changes?

It’s now evident that filing by paper is more expensive than filing electronically. Some services will even cost up to 300% more to encourage online filing over postal applications.

Here are a few of the notable Companies House price increases you may encounter:

Incorporation fees were previously £12 for digital and £40 for paper. New rates will sit at £50 and £71, respectively. This means that starting a business in the UK has suddenly become much more expensive.

If you want to change the company name, expect a jump from £8 (for digital) and £10 (for paper) to £20 and £30, respectively.

If you’re in a rush, you’re in tough luck. Same-day change of name will now set you back £83.

The biggest impact on limited companies will be the fee changes for the confirmation statement. This is a legal requirement, so a limited company has no other choice but to do it. And the price for privilege will jump from £13 (digital) and £40 (paper) to £34 and £62 respectively.

A voluntary strike off was formerly for £8 digital and £10 for paper filings. You can now expect to pay £33 and £44, respectively.

Meanwhile, an administrative restoration will now cost £468 versus £100.

You can check out the complete list of changes here.

How will the Companies House price increases affect my small business?

a female florist standing in front of her shop with lots of flowers on show.

Although the last price increase was in 2016, the massive jump in fees will still be crippling for many business owners.

We are still feeling the effects of the rising cost of living. There is also a current skill and labour shortage many SMEs struggle with. Coupled with the fact that business owners take on many challenges such as limited financial options and keeping up with new technology and industry standards.

On the bright side, the UK has one of the lowest business documentation fees in Europe and worldwide. With a £12 registration fee, the country is ranked 15th for cheapest documentation fees based on The World Bank figures.

After the 1 May increase to £50, the UK jumps to only 21 places lower. In contrast, incorporation fees for Italy currently sit at £3,891— the highest in Europe.

With this, it’s understandable that others are optimistic about the change.

The additional revenue will boost the new services offered by the government. And with the new law, you can access more accurate information on the register.

The push towards digitisation will also result in faster transactions in the future.

These fees, as the Companies House put it, “enable the cost of investigative and enforcement activities that promote the integrity of the register, maintain a healthy business environment, and combat economic crime.”

What will happen if I don’t pay?

These are vital services for keeping your business on the Companies House register. Your company will be removed from the register if you are non-compliant with the new fees.

Unfortunately, as small businesses make up 99% of the UK business population, they will be the ones to bear the brunt of the Companies House price increases. It is understandable if the costs deter current and future business owners.

Our Opinion

Like most small businesses, we here at Business4Beginners, were shocked when we saw the enormous jump in the Companies House fees. There is no doubt that this huge increase will put off some people starting their own business.

Starting your own business is already daunting enough, with many upfront costs to cover. So seeing these costs go up by such a huge amount, won’t help.

Equally, existing small businesses won’t be happy about the increase in fees either. Especially for the annual filing of the confirmation statement, for which the price has more than doubled. With it being a legal requirement for limited companies, any small business of that type has to pay this.

However, we shouldn’t lose sight of the big picture here. As we have already pointed out, the UK is still, even after the price increases, one of the cheapest countries to start and run a business.

And in the big scheme of things, the fees still aren’t prohibitively high. The potential profits from your small business should easily cover the increased costs. And as a limited company you have many benefits, such as allowable expenses, that will outweigh any extra costs from these price increases.

So while the jump in fees does look scary, let’s focus on the big picture. They won’t be so high that they should put off anyone wanting to start their own business. And any existing business should be able to absorb the extra costs.