When undertaking company formation in the United Kingdom, one of the essential steps is choosing a Standard Industrial Classification (SIC) code. This code identifies the nature of your company’s business activity and is required during the company registration process. While it may seem like a minor administrative detail, selecting the correct SIC code can have regulatory, tax, and operational implications.
This article offers a comprehensive explanation of SIC codes, their role in UK company registration, and practical guidance on how to select the most suitable code for your business.
What Is a SIC Code?
A SIC code, or Standard Industrial Classification code, is a five-digit number that classifies the primary activity of a business. These codes are used by Companies House and other government agencies to collect and analyse statistical data regarding different sectors and business types within the UK economy.
The current SIC codes used in the UK are based on the 2007 version, known as SIC 2007. These codes are grouped into categories such as retail, manufacturing, consultancy, financial services, and more.
Every company registered with Companies House must provide at least one SIC code upon incorporation. Businesses with multiple activities may choose up to four SIC codes.
Why Is a SIC Code Important for UK Company Registration?
Including a SIC code is a mandatory requirement when filing your company registration in the UK. Beyond being a legal obligation, it serves multiple practical functions:
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Business Categorisation
Government agencies, including HMRC and Companies House, use SIC codes to understand what type of activity your business conducts. -
Regulatory Oversight
Specific business types may be subject to industry regulations, licences, or compliance obligations. The SIC code helps regulators identify companies in regulated sectors. -
Industry Statistics and Research
SIC codes allow the Office for National Statistics (ONS) and other institutions to analyse business activity across the country, influencing economic reports and policy-making. -
Funding and Tenders
Investors, grant providers, and public sector procurement bodies often use SIC codes to filter businesses by sector or eligibility criteria. -
Tax Classification and Risk Profiling
HMRC may use your SIC code to assess tax profiles, determine applicable tax schemes, or highlight sectors more likely to undergo audits.
Also Read: Understanding Tax Compliances in Dubai
How to Find the Right SIC Code for Your Company
Choosing the right SIC code is a critical step in UK company registration, especially if your business offers a range of services. Here’s how to select the appropriate code:
1. Refer to the Official SIC Code List
Companies House provides the official SIC 2007 list, which can be accessed online. The list is organized by industry sector and includes hundreds of detailed options.
You can find it on the official UK government website or during the online registration process with Companies House.
2. Identify Your Primary Business Activity
Your SIC code should reflect the main purpose of your business. If you operate multiple services, determine which activity generates the majority of your revenue or time investment.
For example:
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A company that primarily provides IT consultancy services but occasionally sells software may list 62020 – Information Technology Consultancy Activities as its main SIC code.
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A marketing agency might use 73110 – Advertising agencies.
3. Use Up to Four Codes (If Applicable)
If your business operates across various sectors, you can list up to four SIC codes. This is particularly useful for companies with a diverse range of services or subsidiaries.
For instance, a company that offers business consulting, financial advice, and software development could use a combination like:
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70229 – Management consultancy activities (other than financial management)
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66190 – Activities auxiliary to financial services
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62012 – Business and domestic software development
4. Avoid Generic or Inapplicable Codes
Do not choose a code simply because it’s close to your industry—accuracy is important. Choosing an unrelated SIC code may result in:
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Misclassification by Companies House or HMRC
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Reduced eligibility for grants or tenders
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Potential compliance issues in regulated industries
Also Read: Understanding Essential Tax Compliances in Abu Dhabi
Common SIC Codes Used in UK Company Formation
Here are a few commonly used SIC codes for newly registered UK businesses:
| Business Type | SIC Code | Description |
|---|---|---|
| Management Consultancy | 70229 | Other business consultancy activities |
| Online Retail | 47910 | Retail sale via mail order houses or Internet |
| Software Development | 62012 | Business and domestic software development |
| Real Estate | 68100 | Buying and selling of own real estate |
| Financial Consultancy | 66190 | Other activities auxiliary to financial services |
| Cleaning Services | 81210 | General cleaning of buildings |
For dormant companies (not trading), the correct SIC code is 99999 – Dormant Company.
Can You Change a SIC Code Later?
Yes. If your business activities evolve or if you chose an incorrect code during incorporation, you can update your SIC code by submitting a Confirmation Statement (CS01) to Companies House.
This statement must be filed at least once a year, but you can file an updated one any time to reflect changes in your business structure or activity.
SIC Code Best Practices for Company Formation in the United Kingdom
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Review the SIC list thoroughly before selecting a code.
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Avoid misrepresenting your business activity, especially if operating in a regulated industry.
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Update your SIC code annually if your business changes focus or expands into new areas.
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Consult a formation agent or legal advisor if you’re unsure which code best represents your activity.
Incorrect SIC coding may not result in immediate penalties, but it can complicate regulatory reporting, tax filings, and funding applications.
Also Read: Why Proper Accounting and Auditing in Dubai is Required?
Frequently Asked Questions
1. Is it mandatory to include a SIC code during company formation in the United Kingdom?
Yes, it is a legal requirement to include at least one valid SIC code when registering a company with Companies House.
2. Can I use more than one SIC code for my company?
Yes, you can include up to four SIC codes if your business operates in multiple sectors. This allows for more accurate classification.
3. How do I change my SIC code after registration?
You can change your SIC code by filing an updated Confirmation Statement (CS01) with Companies House. This process can be completed online and takes only a few days to reflect.
Conclusion
Selecting the correct SIC code is an essential part of the company formation in the United Kingdom. It may appear like a technical detail, but it carries significant implications for how your business is classified, taxed, and regulated. When undertaking company registration in UK, ensure that the SIC code accurately represents your principal activity to maintain compliance and avoid issues down the line.
Whether you’re forming a consultancy, launching an e-commerce venture, or registering a holding company, taking time to understand and choose the correct SIC code will ensure your UK company registration is both accurate and effective from day one.
