UK Incorporation Fees Increased for 2026

Is This a New Barrier for UK Startups?

Let’s get straight to it: the cost is going up. A sudden jump in fees can feel like a setback, especially for entrepreneurs on a tight budget. But is it a genuine barrier? Not necessarily. While the upfront cost is higher, the long-term benefits of formal incorporation—like limited liability, professional credibility, and better access to financing—still far outweigh this one-time charge. Think of it less as a barrier and more as a recalibrated toll on the road to building a resilient and officially recognized business.

A Detailed Breakdown of the New Company Registration Fee

The most significant change is the doubling of the standard digital company registration fee. As of February 1, 2026, entrepreneurs will face a higher cost to get their business officially on the books. This adjustment is part of a wider restructuring of Companies House fees aimed at achieving full cost recovery.

These fees are paid directly to Companies House, the UK’s registrar of companies. According to the UK government, these adjustments are the first significant update in years and are designed to cover the costs of the services provided. You can find a full list of the new charges on the official Companies House fees page.

UK Incorporation Fees: The Myth of the HMRC Incorporation Fee

One of the most common points of confusion for new entrepreneurs revolves around the HMRC incorporation fee. Let’s clarify this: HMRC (His Majesty’s Revenue and Customs) does not charge a fee for incorporating a company. Their role begins after your company is registered with Companies House.

Here’s how the responsibilities are split:

1. Companies House: Handles the legal registration of your company. You submit your application (Form IN01) and pay the incorporation fee directly to them. This is the step that makes your business a distinct legal entity.
2. HMRC: Manages all things tax-related. Once your company is incorporated, you must register it with HMRC for Corporation Tax. This is a mandatory step, but it’s free. HMRC also handles VAT registration and PAYE (for employers), which are separate processes.

Confusing the two is an easy mistake, but it’s vital to direct your queries and payments to the right place. Our HMRC registration service can manage this crucial step for you, ensuring you’re tax-compliant from day one.

Why the Companies House Fee Increase is Happening

The decision to raise the incorporation cost UK wasn’t arbitrary. It’s rooted in a government strategy to enhance the quality and reliability of the company register and ensure business transparency. The primary drivers include:

• Cost Recovery: The new fees are set to cover the actual cost of running Companies House services, removing the reliance on public funding.
• Technological Investment: The additional income will fund significant upgrades to Companies House’s digital infrastructure, aimed at improving security and efficiency.
• Enhanced Powers: The changes align with the Economic Crime and Corporate Transparency Act, giving Companies House greater authority to query and challenge suspicious information, thereby tackling economic crime and improving the integrity of the business environment.

Thinking about forming your company in the UK? We Form Online makes it simple. Our team handles everything from name registration to the new fee structure, ensuring a smooth UK Company Formation.

Step-by-Step: How to Register Your UK Company

Feeling ready to take the plunge? The process is straightforward when you know the steps. Here’s a first-hand look at what’s involved:

1. Choose a Company Name & Structure: Ensure your chosen name is unique and not too similar to another. You’ll also decide on a structure, most commonly a private company limited by shares.
2. Appoint Directors and Shareholders: You need at least one director and one shareholder (this can be the same person). You’ll need their full name, date of birth, nationality, occupation, and official address.
3. Prepare Key Documents: This includes the Memorandum of Association and Articles of Association, which outline how the company will be run.
4. Complete the Application (IN01): This is the official form for incorporation. It requires details about your company, directors, and share structure. This is the stage where you pay the Companies House fee.
5. Register for Corporation Tax: Within three months of starting to trade, you must register with HMRC. This is a critical step that we handle for our clients to ensure full compliance.

Common Pitfalls to Avoid

While the process is logical, there are common mistakes that can cause delays and complications:

• Incorrect Director Information: Providing inconsistent or inaccurate personal details is a frequent cause for rejection.
• Sensitive Words in Company Name: Using words like ‘Royal’, ‘Bank’, or ‘Chartered’ requires special permission and evidence, which can slow things down.
• Forgetting Post-Incorporation Duties: Registration is just the beginning. You must file an annual Confirmation Statement and company accounts each year. The fee for the Confirmation Statement is also increasing, making it a more costly mistake to forget.

Glossary of Key Terms

• Companies House: The UK government body responsible for registering and dissolving companies.
• HMRC: The UK’s tax, payments, and customs authority.
• Incorporation: The legal process of forming a new company, making it a distinct legal entity.
• Memorandum of Association: A legal statement signed by all initial shareholders agreeing to form the company.
• Articles of Association: The rulebook for running the company, agreed upon by the shareholders, directors, and company secretary.
• Confirmation Statement: An annual filing that confirms the information Companies House holds about your company is up to date.

Frequently Asked Questions (FAQs)

1. Does HMRC charge a fee to incorporate a company?
No, HMRC does not charge an incorporation fee. The mandatory registration fee is charged by Companies House.

2. When does the new £100 Company registration fee take effect?
It is scheduled to take effect on February 1, 2026.

3. Is it still worth forming a limited company with the higher fee?
Absolutely. The benefits of limited liability, tax efficiency, and enhanced professional credibility typically far outweigh the one-time increase in registration cost.

4. What is the cheapest way to register a UK company?
Digital filing directly with Companies House or through a trusted formation agent like We Form Online is the most cost-effective method. While our service includes professional fees, it can prevent costly errors and save you time. Check our Company Formation Pricing for transparent packages.

5. How long does UK company formation take?
Standard digital applications are typically processed within 24-48 hours. Same-day services are available for a higher fee.

6. What other UK business costs should I budget for?
Beyond the incorporation fee, consider costs for a registered office address, business banking, accountancy services, and annual compliance filings like the Confirmation Statement.

7. What is a Confirmation Statement?
It’s a snapshot of your company’s key details (directors, shareholders, registered office) that you must file with Companies House at least once a year to confirm the information is correct. The fee for this is also increasing from £13 to £50.

8. Why are the fees for other services like the Confirmation Statement also going up?
The fee increases are across the board to help fund Companies House’s expanded role in improving corporate transparency and fighting economic crime.

Conclusion: A Smarter Way to Start Your Business

Companies House fee increase is a key change in the landscape of UK business costs, but it shouldn’t deter you. Understanding that the HMRC incorporation fee is a myth and that the real cost lies with Companies House is the first step. With a clear budget and expert guidance, this increased cost is just a small, manageable step on your journey to success.

Ready to launch your business without the bureaucratic headache? Start your company formation with We Form Online today, along with our banking partner, WFOPay.com.
Our experts navigate the new fees and complex requirements, so you can focus on building your empire.