SIC codes: choosing the right business activity

What a SIC code does

SIC means Standard Industrial Classification. Companies House uses codes to record the nature of a company’s business. You choose them during formation and review them when filing a confirmation statement.

The label may be broader than the wording you use to describe your startup. Focus on what the company will actually do rather than the type of customer you hope to attract. A company selling software is not automatically classified in the same way as one providing consultancy about software.

Choose from the official condensed list

Search the Companies House condensed list rather than copying a code from an unrelated company. Read the descriptions around your likely choice. There may be separate classifications for manufacturing, wholesale, retail and professional services in the same industry.

If you are unsure between two activities, describe your actual revenue-generating work and ask your accountant or formation provider to help match it. Do not invent a five-digit code or use a classification from a different country.

What if the company does more than one thing?

Companies House permits up to four SIC codes. Use relevant codes for genuine activities; more codes do not make your company more flexible or improve search rankings. Avoid adding unrelated activities just because you might pursue them someday.

A business can evolve. For example, selling a product and separately supplying consulting services may justify different classifications. Revisit the codes when the company changes direction and follow the confirmation statement process to update them.

Dormant and non-trading are not synonyms

The condensed list contains 99999 for a dormant company and 74990 for a non-trading company. These labels should not be used interchangeably without considering the actual circumstances. Choosing a dormant SIC code does not itself establish that a company qualifies to file dormant accounts.

Dormancy for Companies House depends on significant accounting transactions; HMRC uses its own tax definition. Bank interest, charges or other transactions may matter. Read the official dormant-company guidance before selecting a status-related code.

Do not mistake classification for authorisation

A code does not determine every tax obligation, provide a professional qualification or authorise regulated services. Financial services, food businesses and other sectors can need separate permissions or registrations.

Banks and insurers may ask what your business actually does in addition to reviewing its SIC codes. Give accurate descriptions on those applications even where the classification is broad.

Worth knowing: Your business description, contracts and compliance arrangements should match reality, not just a register entry.

A worked approach for a business with more than one activity

Start with what the company actually supplies, who pays it and how revenue is earned. An illustrative agency building software for clients may consider the official software-development classifications, while a business primarily advising management should consider consultancy classifications. Selling software subscriptions, providing IT advice and operating a marketplace are not necessarily the same activity.

Use only codes from Companies House’s condensed list. Up to four can be entered, but four is a maximum rather than a target. Select the main relevant activities and preserve a short note explaining the choice. That note is useful when an accountant, insurer or bank asks why the register describes the company that way.

Review the selection when the business materially changes and when preparing a confirmation statement. A new incidental activity does not justify filling every available slot. If you pivot from consultancy to a distinct product business, assess whether replacing or adding a code gives the clearest current description.

A classification is not a tax election, licence or dormant-status declaration

A SIC entry does not itself register the company for VAT, elect a VAT scheme, establish a rate or grant regulatory permission. VAT Flat Rate Scheme sector selection follows HMRC’s own rules, including the limited-cost-business rules, rather than automatically importing a Companies House code. Keep those decisions separate.

Likewise, entering a dormant classification does not override transactions that make a company active for accounting or tax purposes. A company receiving income or incurring relevant bank charges must assess its actual status. The company’s activities and records carry more weight than a convenient label.

If a code seems broad, supplement it with an accurate business description on account and insurance applications. Do not choose a misleading lower-risk classification to obtain a product that would otherwise be unavailable; ask the provider whether the real activity is supported.

How to Change Your Company's SIC Code

A company’s business activities can evolve. You might pivot to a new market, add a significant new service, or simply realise the code chosen during incorporation was not the best fit. In these situations, you must update your Standard Industrial Classification (SIC) code on the public record at Companies House. This is not merely an administrative task; it ensures that lenders, insurers, and potential clients have an accurate, up-to-date snapshot of your operations. You cannot simply email or call Companies House to request a change. It must be done through a formal, statutory filing, which since late 2025 requires all individuals filing on behalf of a company to have completed a mandatory identity verification process, enhancing the security and integrity of the register.

The primary and most efficient method for changing a SIC code is by filing a confirmation statement (form CS01). While this is a required annual filing, you are not obliged to wait for your 12-month review period to be due. A company can file a confirmation statement at any time to update its information, including its SIC codes. This flexibility is useful for businesses that undergo rapid change. Filing the statement online is the quickest and cheapest route, with the change typically reflected on the public register within 48 hours. This process allows you to add, remove, or replace up to four SIC codes to accurately describe your current business activities.

1. 1

   Wait for your company's confirmation statement period to open, or decide to file one at any time during the year to make a change.

2. 2

   Log in to the Companies House online filing service using your company number and authentication code.

3. 3

   Begin a new confirmation statement (CS01) filing.

4. 4

   Navigate to the 'Trading status and principal activity' section, where you can review, add, or remove your SIC codes.

5. 5

   Carefully check that all other company information in the statement, such as the registered office address and shareholder details, is correct.

6. 6

   Proceed to payment, submit the filing along with the statutory fee of £50 (as of October 2026 for digital filing), and await confirmation.

7. 7

   The change will normally appear on the public record within two working days, and your company's entry on the register will be updated.

Worth knowing: The simplest way to update your SIC code for an existing company is by filing a confirmation statement online, which costs £50 and typically updates the public record within two days.

The Real-World Consequences of an Incorrect SIC Code

While selecting a SIC code can feel like a minor administrative hurdle during company formation, the consequences of getting it wrong can be significant and costly. External organisations, including lenders, investors, and credit reference agencies, use this code as a primary data point for risk assessment and benchmarking. An inaccurate code creates an immediate mismatch between their perception of your business and its reality. A cutting-edge software development firm mistakenly coded as a generic 'IT consultancy' may be overlooked for sector-specific R&D grants or be benchmarked against lower-growth comparables, negatively affecting its credit profile and valuation. The SIC code frames the first impression of your business to the financial world.

These consequences are not theoretical; they manifest as tangible barriers to growth. For example, insurers rely heavily on SIC codes to calculate premiums for public liability and professional indemnity cover. A code that implies higher physical risk (e.g., construction) than your actual office-based work will lead to you overpaying for insurance. Conversely, a code that understates your risk could invalidate your policy. Similarly, banks use SIC data in their lending algorithms. A code associated with a high-failure-rate industry could trigger an automatic loan rejection or result in less favourable interest rates, regardless of your company's individual financial health and robust business plan.

• Higher Insurance Premiums: Insurers may place you in a higher-risk category based on an inaccurate code, unnecessarily increasing your costs.
• Difficulty Securing Finance: Lenders use SIC codes to gauge industry-wide risk; a poorly chosen code can hinder loan or mortgage applications.
• Negative Credit Rating Impact: Credit reference agencies use SIC data to benchmark your performance, and a mismatch can skew their analysis and lower your rating.
• Ineligibility for Grants or Schemes: Many government support programmes are targeted at specific sectors defined by SIC codes. An incorrect code makes you invisible to these opportunities.
• Lost Business Opportunities: Potential B2B clients and partners often search public databases by SIC code to create supplier shortlists.
• Increased Regulatory Scrutiny: A code that doesn't align with your activities (e.g., a financial activity code for a retail business) can attract unwanted attention from HMRC or other regulatory bodies.

Worth knowing: An incorrect SIC code can trigger tangible financial harm, from higher insurance premiums and rejected loan applications to missed government grants and a lower business credit score.

Costs and Timelines for Updating Your SIC Code

When considering an update to your company's SIC code, it's important to differentiate between direct and indirect costs. The direct statutory cost, payable to Companies House, is modest and fixed. As of October 2026, filing a confirmation statement digitally to make the change costs £50. This fee covers the filing of the entire statement, not just the SIC code alteration. If you choose to file a paper form, the cost is significantly higher at £110, and processing takes much longer. Therefore, the online route is almost always preferable for its speed and cost-effectiveness. These statutory fees are the only mandatory expense involved in the update process itself.

The indirect costs, while not as obvious, can be more substantial. These include the value of your time spent researching the correct code from the official list of over 600 options. Choosing the wrong code can have financial repercussions, as discussed elsewhere. For this reason, many businesses opt to pay for professional services. An accountant or company formation agent can provide expert advice, ensuring the chosen code accurately reflects the business activities and minimises risks related to insurance or finance. This professional guidance is an optional but often wise investment, potentially saving the company from much larger costs in the future.

Worth knowing: While the direct statutory cost to update a SIC code digitally is only £50, illustrative professional fees to ensure accuracy could add £150 or more to the total cost.

SIC Codes in Context: How They Compare to Other Business Classifications

A UK limited company is subject to categorisation by several different official bodies, and it is a common mistake to confuse these classifications. Your SIC code is the classification system used by Companies House and the Office for National Statistics (ONS) to categorise the UK economy. Its purpose is primarily statistical and administrative, providing a high-level view of your principal trade for public record. However, this is just one piece of the puzzle. When you register for VAT, HMRC will ask for a 'trade classification', which is their own internal system for assessing tax risk. Similarly, when you employ staff, you will deal with Standard Occupational Classification (SOC) codes for job roles.

Understanding the distinct purpose of each code is crucial for correct compliance. For example, a data science company might use SIC code 62020 (Computer consultancy activities). However, when registering with the Information Commissioner's Office (ICO) to comply with data protection law, its classification is based on fee tiers determined by staff numbers and turnover, not its SIC code. For a small consultancy, this might be a 'Tier 1' registration costing £52, regardless of its highly technical SIC code. Confusing these systems can lead to providing the wrong information to the wrong authority, causing administrative delays and compliance issues.

Worth knowing: A SIC code is purely for Companies House and statistical purposes; do not confuse it with separate classifications required by HMRC for VAT or the ICO for data protection.

Choosing SIC Codes for Holding, IP, and Non-Trading Companies

Not all companies are straightforward trading entities. Many are established for specific, non-trading purposes, such as holding shares in other businesses, managing intellectual property, or simply holding an asset. The SIC code system provides specific classifications for these structures, and selecting the correct one is vital. Using a generic trading code for a holding company, for instance, misrepresents its purpose and can create significant tax complications. The choice of SIC code is an important public declaration of intent and activity, which HMRC and other bodies will use as a starting point for any review.

This is particularly critical for tax reliefs like Business Asset Disposal Relief (BADR). As of 6 April 2026, BADR allows shareholders to pay a reduced Capital Gains Tax rate of 18% on the sale of shares, but only if the company is a 'trading company' or the holding company of a trading group. A company whose primary SIC code is 68209 (Other letting and operating of own or leased real estate) might be deemed a non-trading investment company, making its shareholders ineligible for BADR. Correctly using codes like 64205 (Activities of financial holding companies) or 77400 (Leasing of intellectual property) provides clarity. For a completely inactive company, 74990 (Non-trading company) should be used, which is distinct from a 'dormant' company that has never had any significant accounting transactions.

• Holding Companies: Use SIC code 64205 (Activities of financial holding companies). This clarifies that the company's main function is owning shares in subsidiaries, which is crucial for assessing the trading status of the group for tax reliefs.
• Intellectual Property (IP) Companies: Use 77400 (Leasing of intellectual property and similar products). This is for companies whose main business is licensing patents, trademarks, or copyrights, generating royalty income.
• Non-Trading Companies: Use 74990 (Non-trading company). This code is appropriate for a company that has ceased trading but has not been dissolved, or is a shell awaiting a future project. It is different from a dormant company.
• Property Investment Companies: Use 68100 (Buying and selling of own real estate) for property development or 68209 (Other letting and operating of own or leased real estate) for buy-to-let activities. The distinction has major tax implications.
• Personal Service Companies (PSCs): Often use a consultancy code relevant to their field, like 70229 (Management consultancy activities other than financial management), but must be mindful of IR35 rules regardless of the SIC code.

Worth knowing: For special purpose entities, use specific codes like 64205 for holding companies or 74990 for non-trading companies to accurately reflect their function and avoid jeopardising tax reliefs.

The Critical Link Between Your SIC Code and Business Insurance

When you apply for essential business insurance, like public liability or professional indemnity, your SIC code is one of the first things an underwriter will check. It serves as an immediate, high-level indicator of the risks your business faces. Insurers use sophisticated models that map SIC codes to historical claims data and perceived risk levels. A company with a code for construction (e.g., 43999) will automatically be placed in a much higher risk bracket than one with a code for office administration (e.g., 82110). This initial classification has a direct and substantial impact on the premium you are quoted. An inaccurate SIC code that suggests a riskier trade will mean you pay more than necessary.

A far more dangerous scenario is when your SIC code understates your operational risk. Imagine an IT consultancy (SIC 62020) that also performs on-site hardware installation. If the company fails to also declare a code reflecting this physical work, an insurer could argue misrepresentation in the event of a claim related to an installation accident. This could give them grounds to void the policy and refuse to pay out, leaving your business exposed to the full cost of a liability claim. It is therefore not a detail to be taken lightly. Your SIC codes must form a complete and honest picture of all your business activities, not just the primary one.

• Review Your Policy Wording: Always check that the 'business description' on your insurance policy documents aligns with the activities implied by your SIC code(s).
• Utilise Multiple SIC Codes: You can list up to four SIC codes on your confirmation statement. Use this to represent a mix of activities, such as consultancy and retail, to give a fuller picture.
• Inform Your Insurer of Pivots: If your business expands into a new, potentially riskier area, you must inform your insurer immediately, not just wait until renewal. Update your SIC code at the same time.
• Don't Choose a Code to Save Money: Deliberately selecting an inaccurate, lower-risk SIC code to get a cheaper insurance premium is a false economy that constitutes misrepresentation and could render your policy worthless.
• Consult Your Insurance Broker: If you use a broker, ask them to review your SIC codes as part of their service to ensure they align with the cover being sought.
• Expect Questions: If your SIC code is a 'catch-all' like 74909 (Other professional, scientific and technical activities n.e.c.), expect more detailed questions from insurers to understand the specific risk.

Worth knowing: Your SIC code directly influences your insurance premium and the validity of your cover; ensure it accurately reflects all your business activities to avoid overpaying or having a future claim denied.

Common questions

Official sources & further reading

This guide draws on the official guidance below. Rules, fees and individual circumstances can change; check the relevant source before acting.

• Companies House: Condensed SIC code list
• GOV.UK: Confirmation statement
• GOV.UK: Dormant companies

General UK information, primarily for private companies limited by shares. This is not personalised legal, tax or financial advice. An accountant or solicitor can help apply the rules to your situation.