Setting up a limited company is a big milestone. You choose a name, complete the registration, and you’re ready to start trading. But registering the business is just the first step. There are ongoing responsibilities and costs that come with running a company, and it’s important to understand them from the outset.
If you’re new to business ownership, knowing what to expect will help you plan properly, avoid surprises, and stay on the right side of HMRC and Companies House.
In this article, we breakdown the main ongoing costs.
1) Accountancy and Filing
Every limited company must prepare annual accounts and file them with Companies House. You also need to submit a Company Tax Return to HMRC each year, even if the company hasn’t made a profit.
Some business owners handle this themselves, but many choose to work with an accountant. Costs vary depending on the size and complexity of the business. A small company with minimal transactions will usually pay less than a VAT-registered business with employees and higher turnover.
2) Corporation Tax
Corporation Tax is payable on your company’s profits. It isn’t a fixed monthly expense, but it is an ongoing obligation.
The payment is normally due nine months and one day after the end of your accounting period. Even if your company makes no taxable profit, you must still file a Company Tax Return.
It is good practice to set money aside throughout the year so you are prepared when payment is due.
3) VAT (if applicable)
You must register for VAT if your taxable turnover exceeds £90,000 within a 12-month period. Some businesses choose to register voluntarily before reaching this threshold.
Once registered, you’ll need to charge VAT on your goods or services and submit VAT returns, usually every quarter.
While VAT itself is collected from customers, there are administrative costs involved. You may need VAT-compatible accounting software and, in many cases, professional support to ensure everything is submitted correctly.
4) Payroll and Employer Responsibilities
If you employ staff, you must run payroll through the PAYE system. This involves deducting Income Tax and National Insurance from wages and reporting payments to HMRC each time payroll is processed.
On top of this, you may also need to pay:
- Employer’s National Insurance contributions
- Workplace pension contributions
These are additional costs to the business and should be factored in before hiring.
Even if you’re the only director, paying yourself a salary through payroll still creates PAYE reporting obligations.
5) Business insurance
Depending on your industry, you may need additional insurance such as:
- Public liability insurance
- Professional indemnity insurance
- Product liability insurance
These policies are not always legally required, but many clients and contracts expect you to have them. Insurance protects your business, your finances, and your reputation.
6) Companies House fees
Every limited company must file a Confirmation Statement at least once every 12 months.
As of February 2026, the online filing fee is £50 (or £110 if filed on paper). This is a mandatory annual cost. Failure to file can result in penalties and, in serious cases, the company being struck off the register.
7) Software and tools
Most businesses rely on digital tools to operate day to day. Ongoing costs often include:
- Accounting software
- Payroll software
- Website hosting and domain renewal
- Email services
- CRM systems
Individually these costs may seem small, but together they form part of your monthly overhead and should be included in your budgeting.
If you are a MYCO client, you can access exclusive savings on essential business software and tools. Simply log into your client portal, click on ‘Business Offers’ in the top tab, and explore the partner discounts available to you.
Final Thoughts
Not every company will incur every cost listed above. Some only apply if you hire staff, register for VAT, or operate in certain industries.
The important thing to understand is that running a limited company involves more than just registering it. There are legal duties, filing deadlines, and operational costs that continue year after year.
When you plan for these from the start, you can price your services properly, manage cash flow more effectively, and focus on growing your business with confidence.
Ready to register your company?
If you’re setting up a limited company and want to get it right from day one, working with a trusted formation specialist can give you peace of mind. We’ll help you stay compliant and make sure the right foundations are in place from the start.