{"id":173501,"date":"2024-09-21T11:00:54","date_gmt":"2024-09-21T10:00:54","guid":{"rendered":"http:\/\/realbusiness.co.uk\/?p=173501"},"modified":"2024-11-14T16:02:48","modified_gmt":"2024-11-14T16:02:48","slug":"sic-code-companies-house","status":"publish","type":"post","link":"https:\/\/realbusiness.co.uk\/sic-code-companies-house","title":{"rendered":"What Is A SIC Code &#038; Who Needs One?"},"content":{"rendered":"<div class='booster-block booster-read-block'><\/div><p data-pm-slice=\"1 1 []\"><strong>Standard industrial classification (SIC) plays an important part in labelling a company&#8217;s operations appropriately to communicate what they do. A standard industrial classification code is used as a simple way of communicating what a business does. It&#8217;s important that the most appropriate SIC code is chosen as this information will be used by government agencies, financial institutes and stakeholders to quickly see what a business does.<\/strong><\/p>\n<p>If you own a business or company, then understanding what SIC codes are is important for business compliance, accurate reporting, and communication. The SIC code system is universal and can be an effective way to quickly summarise your business offerings.<\/p>\n<p>Below we&#8217;ll explore what your primary SIC code ought to be, explain the SIC system in greater depth, and explore different UK SIC codes so you better understand what your business&#8217; ought to be.<\/p>\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_74 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-684fdf244ea36\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-684fdf244ea36\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/realbusiness.co.uk\/sic-code-companies-house\/#What_Is_A_SIC_Code\" >What Is A SIC Code?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/realbusiness.co.uk\/sic-code-companies-house\/#When_Do_You_Need_A_SIC_Code\" >When Do You Need A SIC Code?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/realbusiness.co.uk\/sic-code-companies-house\/#How_Do_You_Find_Out_Your_SIC_Code\" >How Do You Find Out Your SIC Code?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/realbusiness.co.uk\/sic-code-companies-house\/#Types_Of_SIC_Code\" >Types Of SIC Code<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/realbusiness.co.uk\/sic-code-companies-house\/#Which_SIC_Code_Should_I_Use\" >Which SIC Code Should I Use?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/realbusiness.co.uk\/sic-code-companies-house\/#What_Happens_If_You_Choose_The_Wrong_SIC_Code\" >What Happens If You Choose The Wrong SIC Code?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/realbusiness.co.uk\/sic-code-companies-house\/#How_To_Change_Your_SIC_Code\" >How To Change Your SIC Code<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/realbusiness.co.uk\/sic-code-companies-house\/#What_If_My_Business_Description_Doesnt_Fit_Into_A_SIC_Code\" >What If My Business Description Doesn't Fit Into A SIC Code?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/realbusiness.co.uk\/sic-code-companies-house\/#Do_I_Need_A_SIC_Code_If_Im_A_Sole_Trader\" >Do I Need A SIC Code If I'm A Sole Trader?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/realbusiness.co.uk\/sic-code-companies-house\/#FAQs\" >FAQs<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/realbusiness.co.uk\/sic-code-companies-house\/#Which_SIC_code_should_a_dormant_company_use\" >Which SIC code should a dormant company use?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/realbusiness.co.uk\/sic-code-companies-house\/#Which_SIC_code_should_a_non-trading_company_use\" >Which SIC code should a non-trading company use?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/realbusiness.co.uk\/sic-code-companies-house\/#Does_every_business_have_a_SIC_code\" >Does every business have a SIC code?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/realbusiness.co.uk\/sic-code-companies-house\/#Is_a_SIC_code_a_legal_requirement\" >Is a SIC code a legal requirement?<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-15\" href=\"https:\/\/realbusiness.co.uk\/sic-code-companies-house\/#Final_Thoughts\" >Final Thoughts<\/a><\/li><\/ul><\/nav><\/div>\n\n<h2><span class=\"ez-toc-section\" id=\"What_Is_A_SIC_Code\"><\/span>What Is A SIC Code?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Standard industrial classification codes, SIC codes, or industrial classification sic codes are all the same thing. They&#8217;re essentially a classification system for grouping companies and their operations. It&#8217;s an information standard that&#8217;s maintained in the UK and EU, and every registered company must submit a SIC code.<\/p>\n<p>Each SIC code is made up of 5 digits, and are organised into sections based on industry. For example, if your company specialises in manufacturing lifting and handling equipment, the SIC code for your company would be 28220.<\/p>\n<p>Of course, not every business in the UK will fit neatly into a single SIC code. Businesses specialising in business support service activities that can vary considerably are allowed up to 4 SIC codes to better explain their niche.<\/p>\n<p>Regardless, every limited company in the UK is required to submit a code alongside their annual accounts each year. Companies House uses this to describe which sector your business operates in, and this information is then shared with the public.<\/p>\n<p>There are over 600 SIC codes, so finding the one for you could be difficult, but you can find help online if you&#8217;re unsure. Companies House posts a full list of codes and their descriptions on their website for business owners.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"When_Do_You_Need_A_SIC_Code\"><\/span>When Do You Need A SIC Code?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>If you&#8217;re a registered company with Companies House then you&#8217;ll need a SIC code to submit alongside your annual accounts. This helps with registering for corporation task, as an employer, and with maintaining business records:<\/p>\n<ul>\n<li>Filing annual accounts: this is required to describe your industry classifications\/sector<\/li>\n<li>Registering for corporation tax: this is required to ensure you are part of the right tax classification and to ensure you&#8217;re paying the right taxes based on your business activities<\/li>\n<li>Registering as an employer: this is required to ensure your business is categorised correctly for employment tax and payroll<\/li>\n<li>Applying for business loans: this is required so that the lender can assess risk levels based on industry group<\/li>\n<li>Public record: this is required as part of the public record so your customers can see what area you operate in and business investors and partners can decide if you might be right for them<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<h2><span class=\"ez-toc-section\" id=\"How_Do_You_Find_Out_Your_SIC_Code\"><\/span>How Do You Find Out Your SIC Code?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>You can find your SIC codes online if you&#8217;ve already filed your annual accounts before. Simply check the government website.<\/p>\n<p>Unsure what to register with if it&#8217;s your first time? You can always contact Companies House directly and seek their assistance.<\/p>\n<p><img fetchpriority=\"high\" decoding=\"async\" class=\"wp-image-193502 size-large aligncenter lazyload\" src=\"data:image\/gif;base64,R0lGODlhAQABAIAAAAAAAP\/\/\/yH5BAEAAAAALAAAAAABAAEAAAIBRAA7\" data-src=\"https:\/\/realbusiness.co.uk\/wp-content\/uploads\/2023\/02\/Real-Business-companies-house-SIC-codes-1024x664.jpg\" alt=\"companies house SIC codes\" width=\"800\" height=\"519\" \/><noscript><img decoding=\"async\" class=\"wp-image-193502 size-large aligncenter lazyload\" src=\"https:\/\/realbusiness.co.uk\/wp-content\/uploads\/2023\/02\/Real-Business-companies-house-SIC-codes-1024x664.jpg\" alt=\"companies house SIC codes\" width=\"800\" height=\"519\" srcset=\"https:\/\/realbusiness.co.uk\/wp-content\/uploads\/2023\/02\/Real-Business-companies-house-SIC-codes-1024x664.jpg 1024w, https:\/\/realbusiness.co.uk\/wp-content\/uploads\/2023\/02\/Real-Business-companies-house-SIC-codes-300x195.jpg 300w, https:\/\/realbusiness.co.uk\/wp-content\/uploads\/2023\/02\/Real-Business-companies-house-SIC-codes-1536x997.jpg 1536w, https:\/\/realbusiness.co.uk\/wp-content\/uploads\/2023\/02\/Real-Business-companies-house-SIC-codes-2048x1329.jpg 2048w, https:\/\/realbusiness.co.uk\/wp-content\/uploads\/2023\/02\/Real-Business-companies-house-SIC-codes-scaled.jpg 1200w\" sizes=\"(max-width: 800px) 100vw, 800px\" \/><\/noscript><\/p>\n<h2 data-pm-slice=\"1 1 []\"><span class=\"ez-toc-section\" id=\"Types_Of_SIC_Code\"><\/span>Types Of SIC Code<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>SIC codes are split into categories as a letter. These sections help you quickly identify the area you ought to be looking for your SIC code.<\/p>\n<ul>\n<li>Section A \u2013 Agriculture, forestry and fishing<\/li>\n<li>Section B \u2013 Mining and quarrying<\/li>\n<li>Section C \u2013 Manufacturing<\/li>\n<li>Section D \u2013 Electricity, gas, steam and air conditioning supply<\/li>\n<li>Section E \u2013 Water supply, sewerage, waste management and remediation activities<\/li>\n<li>Section F \u2013 Construction<\/li>\n<li>Section G \u2013 Wholesale and retail trade; repair of motor vehicles and motorcycles<\/li>\n<li>Section H \u2013 Transportation and storage<\/li>\n<li>Section I \u2013 Accommodation and food service activities<\/li>\n<li>Section J \u2013 Information and communication<\/li>\n<li>Section K \u2013 Financial and insurance activities<\/li>\n<li>Section L \u2013 Real estate activities<\/li>\n<li>Section M \u2013 Professional, scientific and technical activities<\/li>\n<li>Section N \u2013 Administrative and support service activities<\/li>\n<li>Section O \u2013 Public administration and defence; compulsory social security<\/li>\n<li>Section P \u2013 Education<\/li>\n<li>Section Q \u2013 Human health and social work activities<\/li>\n<li>Section R \u2013 Arts, entertainment and recreation<\/li>\n<li>Section S \u2013 Other service activities<\/li>\n<li>Section T \u2013 Activities of households as employers; undifferentiated goods and services producing activities of households for own use<\/li>\n<li>Section U \u2013 Activities of extraterritorial organisations and bodies<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Which_SIC_Code_Should_I_Use\"><\/span>Which SIC Code Should I Use?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Find the SIC code that fits your business activities best. It&#8217;s often best to choose the most appropriate SIC code or, if it helps, you can choose up to 4 SIC codes to help describe your business in the best way possible.<\/p>\n<p>A bookshop\/caf\u00e9 business could, for example, be classed as:<\/p>\n<ul>\n<li>47610 (retail sale of books in specialised stores)<\/li>\n<li>56102 (unlicensed restaurants and cafes)<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<p>Don&#8217;t just choose codes for the sake of choosing codes. If you use too many codes that confuses what your business actually does, then HMRC might choose to penalise you for not being accurate.<\/p>\n<p>You can call Companies House to check which code is right for you to avoid any potential penalties.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"What_Happens_If_You_Choose_The_Wrong_SIC_Code\"><\/span>What Happens If You Choose The Wrong SIC Code?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Choosing the wrong SIC code causes administrative issues:<\/p>\n<ul>\n<li>Issues with paying the right tax as HMRC uses SIC codes to calculate the right taxes and tax amounts for businesses. Providing the wrong code could mean you pay the wrong tax and you could faces fines for doing so.<\/li>\n<li>Business loan lenders use SIC codes to assess risk &#8211; having the wrong one can affect your rating meaning you might miss out on the financial support you need to expand your business.<\/li>\n<li>Inaccurate filing can result in fines from Companies House.<\/li>\n<li>If you deliberately provide the wrong code to avoid tax obligations, you could face legal repercussions.<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<p>The wrong SIC code can cause issues down the line so it&#8217;s really important that you choose the right one from the start.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"How_To_Change_Your_SIC_Code\"><\/span>How To Change Your SIC Code<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Whether through mistake or due to a change in business activities, UK companies do have the option to change their SIC codes.<\/p>\n<p>To change, you&#8217;ll need to file an early confirmation statement early with Companies House. The form is online and only takes 30 minutes or so to fill out thoroughly. Once submitted, you can then update your code.<\/p>\n<p>If your business activities change with a new annual account submission, it&#8217;s also possible to update the code on your annual confirmation statement. Once updated, you should also contact HMRC to ensure they know about the change for tax purposes.<\/p>\n<h2>What If My Business Description Doesn&#8217;t Fit Into A SIC Code?<\/h2>\n<p>With 600+ codes to choose from, you&#8217;ll more than likely find a code for your company, especially since you can choose 4 if necessary. If you&#8217;re struggling, reach out to Companies House. You might also be able to ask an accountant for help when submitting your annual accounts.<\/p>\n<p>Choosing your company&#8217;s SIC code can be complicated but with the right support you&#8217;ll be able to find the right one.<\/p>\n<h2>Do I Need A SIC Code If I&#8217;m A Sole Trader?<\/h2>\n<p>Sole traders don&#8217;t file confirmation statements with Companies House &#8211; only limited companies do, so only limited companies need a SIC code.<\/p>\n<p>However, if you&#8217;re applying for a business loan as a sole trader you might be asked to provide a SIC code. In this instance you&#8217;ll simply need to look up SIC codes on Companies House and choose the one that best fits you.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"FAQs\"><\/span>FAQs<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<h3><span class=\"ez-toc-section\" id=\"Which_SIC_code_should_a_dormant_company_use\"><\/span>Which SIC code should a dormant company use?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>A dormant company is one that is not trading and does not have any significant financial transactions going through its books.<\/p>\n<p>A dormant company is one that is not trading currently and without any financial transactions on record. In this situation, companies should choose SIC code 99999 (Dormant company). This lets HMRC know that you&#8217;re no longer active and as a result, will not need to pay corporation tax.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Which_SIC_code_should_a_non-trading_company_use\"><\/span>Which SIC code should a non-trading company use?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>A non-trading company is a company that is not actively trading but still has financial transactions going through its books.<\/p>\n<p>A non-trading company is one not actively trading but does have a few financial transactions on record. In this instance, the code 74990 should be used as this tells HMRC that no active trading is occurring but the company is still active.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Does_every_business_have_a_SIC_code\"><\/span>Does every business have a SIC code?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Yes. In order to file an annual confirmation statement and submit precise tax returns, all limited companies must have an applicable SIC code away.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Is_a_SIC_code_a_legal_requirement\"><\/span>Is a SIC code a legal requirement?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Yes. It is required to provide a SIC code for the business when incorporating a company. Without it, you cannot legally create a limited company. Companies House uses this code to determine what type of business you are running.<\/p>\n<p>Every time you file a confirmation statement, you will be asked to check and update this code. Make sure it&#8217;s accurate since this is the only chance to do so.<\/p>\n<p>If you have a limited company, you are required by law to have a SIC code assigned to your business. You are not allowed to run your business without a SIC code.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Final_Thoughts\"><\/span>Final Thoughts<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Getting your head around SIC codes might seem impossible at first, but you can achieve it easily enough with the right support from Companies House, HMRC, or a trained accountant.<\/p>\n<p>Simply check out the Companies House website and search the list of SIC codes to find the one(s) that best describe your business. Get it right, and you&#8217;ll seamlessly interact with HMRC and Companies House, making complicated tasks that much easier. It also communicates your business succinctly to investors, partners, and customers, making business dealings that much simpler.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Standard industrial classification (SIC) plays an important part in labelling a company&#8217;s operations appropriately to communicate what they do. A standard industrial classification code is used as a simple way of communicating what a business does. It&#8217;s important that the most appropriate SIC code is chosen as this information will be used by government agencies, [&hellip;]<\/p>\n","protected":false},"author":26234,"featured_media":173505,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_mi_skip_tracking":false,"footnotes":""},"categories":[11875],"tags":[11256,11979,12013,6745],"class_list":["post-173501","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-accountancy","tag-industry-insights","tag-jan-p","tag-p2023","tag-small-business-administration"],"views":1416,"_links":{"self":[{"href":"https:\/\/realbusiness.co.uk\/wp-json\/wp\/v2\/posts\/173501","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/realbusiness.co.uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/realbusiness.co.uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/realbusiness.co.uk\/wp-json\/wp\/v2\/users\/26234"}],"replies":[{"embeddable":true,"href":"https:\/\/realbusiness.co.uk\/wp-json\/wp\/v2\/comments?post=173501"}],"version-history":[{"count":0,"href":"https:\/\/realbusiness.co.uk\/wp-json\/wp\/v2\/posts\/173501\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/realbusiness.co.uk\/wp-json\/wp\/v2\/media\/173505"}],"wp:attachment":[{"href":"https:\/\/realbusiness.co.uk\/wp-json\/wp\/v2\/media?parent=173501"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/realbusiness.co.uk\/wp-json\/wp\/v2\/categories?post=173501"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/realbusiness.co.uk\/wp-json\/wp\/v2\/tags?post=173501"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}