Setting up a business is not easy. You encounter a variety of administrative hurdles. One of the crucial yet overlooked requirements is selecting the correct SIC code.
This 5-digit code is a legal requirement for most registered companies that informs regulators, potential partners, and banks about your business activities.
Read this blog to break down what an SIC code is and how to ensure you select the right code for your business.
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What is an SIC Code? What Does SIC Stand for?
SIC stands for Standard Industrial Classification. It is a 5-digit code that is used by the UK government (HMRC, Companies House) to categorise and track businesses for regulatory and statistical purposes.
According to the Office for National Statistics, “the SIC code system provides a framework to collect and present a large range of statistical data according to economic activity”.
There are more than 600 individual industry codes available to describe your business’s nature. For example, the SIC code for the construction company is 41202, and for electrical installation it is 43210.
The business classification codes make it easy for Companies House to track the number of companies operating in the UK. It also helps to track industry growth, economic trends, and the overall health of the UK economy.
Visit the official website for more information on Companies House and its rules for SIC.
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Hierarchy of The SIC Code
The first two digits of the code define the broad and major industry group. On the other hand, the remaining digits provide specific details of the industry.
You can check the industries by hierarchy or keyword. Once you select the initial 2 digits, you can view the full hierarchy down to the remaining digits, and each level becomes more specific. The table below shows how the hierarchy works.
| Level | Identifier | Name | Purpose |
| Section | C | Manufacturing | Broad category (letter is used for navigation) |
| Division | 10 | Processing and preserving of meat | General industry area (First 2 digits) |
| Group | 101 | Processing and preserving of poultry meat | Industry group narrower (First 3 digits) |
| Class | 10130 | Production of meat and poultry products | Specific business type (First 4 digits) |
| Subclasses | 10200 | Processing and preserving of fish, crustaceans, and molluscs | The actual 5-digit code |
Note: When searching for a code in the Companies House condensed list, simply put the 5-digit code. Do not search using letters.
Choosing the Right SIC Code
Use the condensed list of SIC codes provided by Companies House to find a business code for your company. There are 21 main industry categories in the list, and each category defines more specific trade activities.
You can select up to 4 codes if you are providing various trades or goods. This shows the diverse nature of your business activities.
You still need to provide a Standard Industrial Classification code, even if your company is dormant or not yet trading. Use the find and update company information services if you need verification after making your SIC choice. This service also allows you to view competitors operating in the same industry.
Condensed SIC Code List
You must only use the codes mentioned on the condensed SIC code list when you are filing with Companies House. This ensures accurate incorporation with Companies House. Failing to do so may result in the rejection of your filing. The list contains codes and descriptions of the businesses.
Business Category List UK
The table below shows the main business category codes in the UK:
| Code Categories | Business domains |
| 01-09 | Agriculture, Forestry, and Fishing |
| 10-14 | Mining |
| 15-17 | Construction |
| 20-39 | Manufacturing |
| 40-49 | Transportation and utilities |
| 50-51 | Wholesale Trade |
| 52-59 | Retail trade |
| 60-67 | Finance, insurance, and real estate |
| 70-89 | Services |
| 91-99 | Public administration |
How many SIC Codes Do I Need for My Company?
In most cases, you are given the choice to pick one or more codes that fit best and closely describe what you do. Usually, businesses pick one primary code. However, if your business does more than one activity, you may need more codes. You can also use a combination of codes to describe your company’s area of activity.
Note: You must select a business code based on what you do, not what you sell incidentally. You should choose a code that accurately reflects your primary business activity, rather than selecting one based purely on keyword similarity.
Changing SIC Code
You can change or upgrade your chosen code if your business activities change after company formation. Also, if you have provided the wrong SIC code while setting up your company, you can change it.
To change or upgrade the code information, you can file a confirmation statement as soon as possible. Try to keep your information up-to-date so that anyone looking to do business with you has accurate information and you don’t miss out on opportunities. You can use online services to update your information and make changes.
Why is a SIC Code Important?
Choosing the right code is essential because it has real-world implications for your business.
Financial Credibility
Lenders and banks use SIC codes to assess your industry profile when you apply for a business account or loan.
Regulatory Compliance
If you fail to provide this code during incorporation, your application for company formation may be rejected.
Targeted Marketing
Businesses use this code to analyse competitors or to find potential B2B clients in their specific niche.
Tax and Grants
HMRC uses this code to determine your eligibility for specific industry grants and to calculate the correct tax rules.
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What Do I Need a Business SIC Code?
While registering as a new company with Companies House, you need to include the business code. Companies House requires all registered limited companies to provide a SIC code. You need a business code:
- When you are registering your business
- For annual filing
- To show dormant or non-trading status
- For VAT registration
- Grants and Funding
Who is Exempt From Providing SIC Code?
Sole traders do not have to get a business code as they are not registered with Companies House.
Moreover, limited liability partnerships (LLPs) are not required to provide a business classification code at any stage of their filing.
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Final Thought
If you are a limited company, registered with Companies House, you must have an SIC code. This enables Companies House to track the number of companies operating in each sector and monitor emerging industry trends.
Additionally, you must keep updated information about your business to ensure accuracy. In case of changing business activities, inform Companies House through a confirmation statement and update the changes on time. If you are still confused, it is best to seek professional help.
Disclaimer: The information provided on AccountingFirms.co.uk is for informational purposes only and should not be considered as financial advice. Always consult with a professional accountant to ensure compliance with UK laws and regulations.
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