How much does it cost to create a limited company in 2026/27?

For practitioners advising clients on incorporation during the 2026/27 financial year, the financial landscape of setting up a UK company has shifted significantly. Following the sweeping reforms of the Economic Crime and Corporate Transparency Act 2023 (ECCTA 2023) and the February 2026 Companies House fee updates, advisors must account for strict statutory registration fees, mandatory digital software costs, and identity verification overheads.

When clients ask how much does it cost to create a limited company, you must break the answer down into initial Companies House fees, professional verification costs, new mandatory software subscriptions, and ongoing administrative levies. Furthermore, you must correctly classify these costs for tax purposes.

Statutory Registration Fees (February 2026 Updates)

Companies House significantly increased incorporation fees in February 2026. The route you use to form the company directly dictates the cost.

• Online Registration: Standard incorporation using the GOV.UK online service costs £100.
• Software Registration: Standard incorporation filed via third-party commercial software also costs £100.  If you require a same-day software incorporation, Companies House charges a premium fee of £156.
• Paper Registration: Companies House heavily discourages paper applications. If you submit a paper incorporation form (IN01), the fee increases to £124.

ECCTA 2023 Identity Verification and ACSP Fees

The days of anonymous, unverified company formations are over. Under the ECCTA 2023 framework, every new director and Person with Significant Control (PSC) must undergo mandatory identity verification before acting.

Section 1110B of the Companies Act 2006 empowers the Secretary of State to mandate strict verification procedures, stating the regulations will cover “the procedure for verifying or reverifying an individual’s identity, including the evidence required”.

While Companies House itself does not currently charge a distinct “verification fee” on top of the incorporation cost, the practical reality introduces third-party costs. Directors must verify their identity directly via the Registrar or through an Authorised Corporate Service Provider (ACSP). Because ACSPs (such as accounting or law firms) must absorb the administrative and technological burden of conducting these checks, they charge professional fees for this service. Advisors should factor in these ACSP fees, which vary by firm, as a mandatory cost of creating the limited company.

Mandatory Commercial Software Costs (From 1 April 2026)

A pivotal procedural change took effect in the 2026/27 tax year. HMRC closed the free “File your accounts and Company Tax Return” online service.

From 1 April 2026, companies must use commercial software to file their annual accounts and Corporation Tax returns.  Consequently, creating a limited company now inherently carries the ongoing cost of subscribing to compliant third-party commercial software or paying an accountant who utilises such software. You can no longer manage a company’s statutory filings entirely for free using standard government web portals.

Ongoing Administrative Levies: The Confirmation Statement

Beyond the initial formation, the company must pay annual maintenance fees to remain on the register. Every company must file an annual Confirmation Statement (previously the Annual Return).

For the 2026/27 period, the Confirmation Statement fee is £50 if filed online or via software.  If the company insists on filing a paper Confirmation Statement, the fee more than doubles to £110.

Tax Deductibility of Formation Costs

Clients routinely ask if they can deduct the costs of creating the limited company against their new company’s Corporation Tax profits. The strict answer is no.

HMRC treats the costs of incorporating a new company as capital expenditure. The Business Income Manual (BIM35615) explicitly denies revenue deductions for these formation expenses, regardless of whether the founders created the company solely for trading purposes.

“As explained in BIM35525 expenditure in connection with the acquisition, alteration, enhancement or defence of the fundamental structure of a business is generally capital. The cost of creating a new company is also capital notwithstanding that such creation is for the purposes of the trade of an existing company.”

Because the formation of the corporate entity creates an enduring fundamental structure, the client must bear the £100 incorporation fee (and associated ACSP setup costs) out of capital; they cannot offset it against their gross trading income.

Summary: 2026/27 Company Creation Elements

For completeness, consider reviewing the client’s proposed registered office address arrangement, as utilising a professional registered office service will add a further non-statutory annual cost to their overall incorporation budget.