When setting up a limited company, a key piece of information you’ll need is the SIC code. But what is this, and why is it so important for your company’s classification?
SIC codes are used to classify businesses by their economic activities. They help government bodies, like Companies House and the Office for National Statistics, understand the UK economy.
I’ve been through this, and will guide you on choosing your code.
What is a SIC code?
A Standard Industrial Classification (SIC) code is a five-digit number identifying your company’s main business activity. It uses the UK Standard Industrial Classification 2007 system.
These codes categorise your business. For instance, a company in real estate might have a code starting with 68, for “Real estate agencies“.
If you are letting properties you own, then you would come under section L and more specifically, letting and operating of own or leased real estate.
Why SIC codes matter for your limited company
These codes are crucial for several reasons:
- Legal requirement: Companies House requires at least one SIC code when you register.
- Statistical analysis: They help track economic activity and industry growth, useful for national statistics.
- Business insights: They can help you understand your industry and potential competitors, providing vital business intelligence.
- Investor information: Investors use SIC codes to find companies in specific industries.
How to choose the right SIC code for limited company
Choosing the correct SIC code means accurately showing your business activities. Here’s a simple guide:
- Identify your main activity: What’s the primary service or product?
- SIC codes list: Companies House has a searchable condensed list of codes.
- Be specific: Pick the closest match for your main activity.
- Consider several codes: You can pick up to four SIC codes for diverse activities.
Common SIC codes for IT contractors
Many IT contractors often use these codes:
|
SIC Code |
Description |
|---|---|
|
62012 |
Business and domestic software development |
|
62020 |
Information technology consultancy activities |
|
62090 |
Other information technology support service activities |
These are just a few examples. There may be other SIC codes relevant to your business.
Common SIC codes for property and real estate
Here are some frequently used codes in the property and real estate sector:
|
SIC Code |
Description |
|---|---|
|
68209 |
Letting and operating of own or leased real estate |
|
68100 |
Buying and selling of own real estate |
|
68320 |
Management of real estate on a contract basis |
|
41100 |
Development of building projects |
The above codes cover a variety of activities. If you’re unsure, it’s a good idea to double check.
When and how to update your SIC code
Your SIC code should change as your business does. You update it when filing your confirmation statement.
Here’s how to update your code:
- Log in to your Companies House account.
- Choose ‘File a confirmation statement‘.
- Check your company details.
- Change the SIC code section.
- Submit your statement.
If your activities change significantly, file an early confirmation statement. You don’t have to wait.
The Importance of Accuracy
Choosing the right code is about accurate representation. An incorrect code can lead to:
- Wrong industry statistics.
- Confusion for investors.
- Incorrect public business data.
If unsure, ask your accountant. A company formation specialist can also help.
SIC codes for dormant and non-trading companies
Even dormant companies need a SIC code. Use 99999 for dormant company accounts.
Non-trading companies should use 74990. A non-trading company is considered differently than a Dormant Company by Companies House.
The future of SIC codes
SIC codes change with the business world. Regular updates include new industries. Recent updates include digital and green economy businesses.
Staying updated helps keep your company’s classification correct. New codes are created as the economy evolves and new business models emerge.
Changes could include things like updates to classifications for online retail. Emerging sectors may receive their own individual SIC codes to better reflect the UK economy.
Specific examples of SIC code changes
Consider these examples. A business initially focused on manufacturing plastic products (SIC code 22290) might expand.
If they begin recycling hazardous waste, they might add SIC code 38220.
SIC code groupings and structure
SIC codes are organised hierarchically. The first two digits represent broad industry sectors.
The next digits narrow down the specialisation. Understanding this can help you select and change your codes as required.
For instance:
- Section E covers water supply, sewerage, waste management, including dealing with non-hazardous and hazardous waste.
- Section F covers Construction, with groups including construction of buildings and specialized construction.
- Section G covers wholesale and retail trade. Including things such as: retail sale in specialised stores and repair of motor vehicles.
- Section H includes transport. Such as: freight rail transport.
- Section M covers professional, scientific, and technical activities, such as the activities of head offices and accountancy services.
- Section Q covers human health and social work activities. This section includes mental health residential care activities.
Handling multiple business activities
Many limited companies have several activities. You can assign up to four SIC codes to cover the scope of your business.
If one activity is much larger, it’s your main business activity. List additional codes that represent other significant parts of your business. It’s quite common to assign multiple SIC codes, to make sure the classification of the company and it’s business activities is correct.
This helps provide a fuller picture. For example, a company might have codes for retail, distribution, and e-commerce activities.
Consequences of the wrong SIC code
Using the wrong SIC code might seem minor. It can actually have several effects. Government bodies rely on accurate data.
Inaccurate codes could lead to incorrect reporting of your sector’s economic performance. For instance, growth in a certain industry might be misreported because many companies are wrongly classified. This impacts statistical data collected for economic analysis.
Banks, investors, and researchers often analyse industry-specific data. Incorrect SIC codes can distort these analyses.
Differences in international industrial classifications
While the UK uses its own UK Standard Industrial Classification system, other countries have similar systems. However, codes can differ, complicating international comparisons.
The United Nations maintains an International Standard Industrial Classification (ISIC). Businesses operating internationally need to understand these differences when reporting activities.
Resources for choosing and updating your SIC code
Several tools can help you to find the most relevant codes for your business:
- Companies House provides a condensed list and detailed guidance. This includes: an online directory and PDF documents explaining code structure.
- The Office for National Statistics (ONS) offers further detail. ONS classifications support UK Standard Industrial Classification of Economic Activities.
- Third-party company services often provide assistance with code selection. This can include automated tools that suggest codes based on your described activity.
Conclusion
Using the right SIC code for a limited company is important. It’s not just about rules, but also accurately showing your business.
Your SIC code is public. It describes what your business does.
By choosing the right code, you meet legal needs and help show your company’s place in the economy. Accurate classification can be a valuable way to give your company proper recognition.
FAQs about SIC code for limited company
What is an SIC code, and why does my limited company need one?
An SIC code (Standard Industrial Classification code) is a five-digit number that categorizes your company’s business activities. Companies House requires all UK limited companies to select at least one SIC code when registering.
SIC codes help:
– Identify your business sector for official records.
– Provide industry data for government statistics.
– Ensure compliance with business regulations.
You can find the full list of SIC codes on the Companies House website.
How do I choose the correct SIC code for my limited company?
To choose the right SIC code:
- Check the official SIC code list on the Companies House website.
- Identify the code(s) that best describe your company’s main activities.
- If multiple activities apply, you can choose up to four SIC codes.
If you’re unsure, search for similar businesses on the Companies House register to see what SIC codes they use.
Can I change my company’s SIC code after registration?
Yes, you can change your SIC code if your business activities evolve. To update your SIC code:
- File a Confirmation Statement (CS01) with Companies House.
- Update your SIC code through the Companies House WebFiling service.
Changes take effect once your new Confirmation Statement is processed.
What happens if I choose the wrong SIC code?
If you select an incorrect SIC code:
– It may misrepresent your business to HMRC, investors, and lenders.
– You might receive irrelevant regulatory notices or tax obligations.
– Your company’s activities may appear misleading on public records.
To correct it, simply update your SIC code in your next Confirmation Statement.
Where can I find a full list of UK SIC codes?
The full list of UK SIC codes is available on the Companies House website or the Office for National Statistics (ONS) website.
You can also search for SIC codes on Companies House WebFiling when registering or updating your company details.
