Among the changes being introduced to UK limited company formations on 30th June 2016 is the requirement for new companies to state their SIC code. Previously a limited company was not required to state what their SIC code is until they filed their annual return at the end of their first year (annual returns are also being replaced by Confirmation Statements).
What is an SIC code?
Standard Industrial Classification (SIC) codes are used to classify businesses into different industries. The codes are regularly reviewed and the most recent one is from 2007. These were brought into line with the EU NACE codes so that the same standard classifications are now used in all EU Countries. The UK is also obliged to report the numbers of businesses in each code back to the EU statistics body, Eurostat. As the UK Office for National Statistics (ONS) state:
The NACE regulation, therefore, made it obligatory on the UK to introduce a new Standard Industrial Classification, SIC (92), based on NACE Rev. 1, and to use it where the UK is required to transmit to the European Commission statistics on economic activity.
The current SIC list is broken into different areas. At the top level are the broad industries. These are:
|A||AGRICULTURE, FORESTRY AND FISHING|
|B||MINING AND QUARRYING|
|D||ELECTRICITY, GAS, STEAM AND AIR CONDITIONING SUPPLY|
|E||WATER SUPPLY; SEWERAGE, WASTE MANAGEMENT AND REMEDIATION ACTIVITIES|
|G||WHOLESALE AND RETAIL TRADE; REPAIR OF MOTOR VEHICLES AND MOTORCYCLES|
|H||TRANSPORTATION AND STORAGE|
|I||ACCOMMODATION AND FOOD SERVICE ACTIVITIES|
|J||INFORMATION AND COMMUNICATION|
|K||FINANCIAL AND INSURANCE ACTIVITIES|
|L||REAL ESTATE ACTIVITIES|
|M||PROFESSIONAL, SCIENTIFIC AND TECHNICAL ACTIVITIES|
|N||ADMINISTRATIVE AND SUPPORT SERVICE ACTIVITIES|
|O||PUBLIC ADMINISTRATION AND DEFENCE; COMPULSORY SOCIAL SECURITY|
|Q||HUMAN HEALTH AND SOCIAL WORK ACTIVITIES|
|R||ARTS, ENTERTAINMENT AND RECREATION|
|S||OTHER SERVICE ACTIVITIES|
|T||ACTIVITIES OF HOUSEHOLDS AS EMPLOYERS; UNDIFFERENTIATED GOODS-AND SERVICES-PRODUCING ACTIVITIES OF HOUSEHOLDS FOR OWN USE|
|U||ACTIVITIES OF EXTRATERRITORIAL ORGANISATIONS AND BODIES|
There are then over 600 individual SIC codes which can be used to classify the specific activities businesses do. Some of them are pretty obscure with codes covering:
Code – 01.44 – Raising of camels and camelids
Code – 16.24 – Manufacture of wooden containers
Code – 38.31 – Dismantling of wrecks
Code – 51.22 – Space transport
The SIC codes are used by bodies such as the Office for National Statistics and Companies House to track the number of companies in different industries. This helps them to see trends emerge and to track the health of different parts of the economy.
What are the new rules?
Previously new limited companies only had to declare what their SIC code was on their annual return at the end of their first year. (The other times when they might need to declare their SIC code was when applying to be registered for VAT). Now all limited companies will need to declare their SIC code when they are created. Companies can have more than one SIC code so that they can reflect the different activities that they do. They will then have to confirm that their SIC codes are still relevant each year.
If you are doing a company formation through The Company Warehouse you will be given a searchable list of SIC codes to pick from. If you struggle to find the right code for your business you can give us a call on 0800 0828 727 and we can help you to select the right one.