What is a limited company SIC code - YouTube

Hello Nicholas Campion here with another instalment of whiteboard

thursdays brought to you by 1st Formations in

today's video we are looking at company SIC codes

and to do this we're going to explore where to find

company SIC codes what sort of SIC codes your company can use

and of course how to change your codes in the future should you require

so an SIC code or to use its full name the standard industrial classification

code is a unique sequence of five numbers

that represent a specific economic activity

when the new UK company is incorporated the company's house

at least one SIC code needs to be reported

and this is to classify the sort of trade carried out by that business

introduced by the office for national statistics the ONS in 1948

the use of SIC codes in the UK provides a framework for the collection

presentation and analysis of data this enables government agencies and

non-governmental bodies to get a better understanding of the types of businesses

operating here in the UK companies house uses SIC codes

to track the number of uk registered companies operating in different

industries this helps them identify emerging trends

or monitor the health of individual industry

sectors and to understand the ever-changing economic landscape

across the UK so to start with let's talk about where you can find the

SIC codes for your company now you can find the available SIC codes

on the condensed list of SIC codes directly from Companies

House now this is a compact version of the

full list of the UK standard industrial

classifications of economic activities published in 2007

which is available directly from the ONS you can only use SIC codes from the

condensed list when making filings at Companies House

and the sort of filings that you're looking at are

your company formation and your Confirmation Statement

if you fail to include SIC codes on here you know your filing may be rejected

so if your company is using an old SIC code from one of the

perhaps the 2003 version you need to find the equivalent 2007

and provide that one and send it in on your next confirmation statement

the condensed list of SIC codes categorizes over

700 economic activities into broadly 21 different groups

examples of these groups include section A which is agriculture

forestry and fhishing section J which is information and communication

and section L for real estate activities to find your code you need to search the

condensed list to find the most appropriate trade description

and find the corresponding sic code to that

although the list is considerable it is by no means exhaustive

that means you may have to provide more than one sic code

to adequately describe what your business is doing

some trade descriptions are very specific such as growing grapes or

plastering meanwhile there are some that are very

general such as physical well-being activities

or even simply other business support activities

not elsewhere classified how easy it is to find the most appropriate sic code

for yourself really depends on the sort of things

your company is doing and you may need to spend some time

looking through the list to find the code that's best suited for you

so that's where you can find sic codes but how many sic codes can your company

actually report now we mentioned at the start that at

least one code has to be provided during the formation process

even if your company is dormant or non-trading

most people find that one is sufficient for their needs however you can use up

to four if your business

activities are varied or complex or simply can't be described in one

single code you always want to get the best sort of

coverage of your company's activities with your codes so in many cases it

might be beneficial or indeed it is the best choice

for you to use multiple codes for example if you have a cafe or restaurant

that provides takeaway and off-licence services

you can use the code 56101 licensed restaurants together with 56103

takeaway food and of course 46342 wholesale of alcoholic beverages but you

should be wary of using multiple SIC codes

for property activities this can sometimes pose a challenge with HMRC

mortgage lenders and other finance providers if all of the activities here

are carried out through one company in such instances we would strongly

recommend seeking professional advice and assistance from an accountant before

making any applications to third parties now businesses can change over time

and so you might be wondering yourself can you change your SIC codes with it

and of course the simple answer to that is yes

you can change your SIC code or codes if you have multiple

at any time if your principal business business activity

changes or it becomes more varied simply find the most appropriate SIC code

on the condensed list and then report it on the next Confirmation Statement

alternatively you can report the SIC codes in real time

by simply filing your next Confirmation Statement early

1st Formations does actually provide a confirmation statement service which is

ideal for just these sorts of purposes the fee for this is just £34.99 and more

information can be found on our website now let's briefly discuss what you

should do if you provide the wrong SIC code on your

company and this happens quite often it's not really a huge issue simply

because this sort of error can be fixed quickly and quite

easily but we do recommend if you find you've got the wrong SICs to

change them as soon as possible otherwise you may face issues with

lenders insurers and so forth SIC codes are particularly important to

lenders and insurance underwriters because the activities of a company play

a crucial role in their decision-making process

providing the wrong information could lead to rejected finance applications

and invalid insurance policies finally let's talk about the SIC codes

you should use if your company is dormant now dormant and non-trading

companies actually have their own specific SICs

that they can use if your company is dormant i.e. it's not

trading and has no significant accounting

transactions going through you should use the SIC code 99999

if your company is non-trading however

which is where it's not really doing any business but certain transactions are

still going through the books then you would want to use 74990

and that's it so in this video we have looked at what an SIC

code is where you can find them how you can change them

and what to do if you've accidentally provided the wrong one

if you have any questions with what we've discussed here today

let us know in the comments don't forget to like this video

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we'll see you next time cheerio