When you form a new limited company, you need various pieces of information to complete the submission. One of these is the Standard Industrial Classification (SIC) code you want to associate with your company.
What is a UK SIC code?
It is a unique 5-digit sequence that represents a specific economic activity your new company will undertake.
Several countries use the standard industrial classification to collect, measure, analyse and present data on business activities.
In the UK it was established in 1948 and continues to be revised, with the current system being UK SIC 2007.
The codes are split into 21 main trade sections ranging from section A to section U (e.g. “Section K – Financial and insurance activities”).
These sections are further broken down into 88 divisions, then into 272 groups, then into 615 classes and 191 subclasses.
How do you find your limited company SIC code?
A limited company needs one SIC code, but it may have up to four codes if it has specialised, complex or varied trades.
You can view the entire list here.
To find out the appropriate SIC codes to use during the formations process, you can search the SIC database.
Enter some keywords, and the page will return some suggested SIC codes. See the screenshot below:
Why are SIC codes important?
SIC codes are used by the government to identify the number of companies in different industries, to monitor the strength of the economy, and identify existing and emerging trends.
The data allows research firms to gather data that can help policymakers, scientists and businesses to understand economic conditions and make improvements where possible.
Insurance underwriters and lenders also use the data to identify trends within industry sectors, and assess risk.
As a result, if you are setting up a company dealing with property activities, you should take extra care when choosing codes to avoid potential problems with mortgage lenders, finance providers and HMRC.
Can you change or add your limited company SIC code?
You can change or add codes if you provided the wrong code during company formation or if your principal business activity changes or becomes more varied.
For immediate code changes, you can file an early confirmation statement.
Dormant and non-trading company SIC codes
Dormant companies with no significant accounting transactions and that don’t trade should use specific code 99999.
Non-trading companies, such as those that are not doing business but have transactions going through their books, should use SIC code 74990.
If you’re setting up a new company, take your time to research the appropriate SIC code. Talk to an accountant or other professional if you have any concerns or questions.