The Standard Industrial Classification of Economic Activities (SIC) is a system used to classify businesses in the UK. This classification was introduced in 1948 and has since become an essential part of setting up a company.
What is a SIC Code?
So, what exactly is a SIC code? A SIC code is a series of numbers that represent different levels of classification in the sense of hierarchy for a business. These codes are used to identify the primary activity of a company and its specific industry. They are 5 digits long and are assigned to a business based on its activities or services, starting with a letter from A to U.
For example, "trade of electricity" is under section D, 35140.
Why is the SIC Code important?
The SIC code list can be found on the Companies House website and is used for various purposes, such as statistical analysis, registering for taxes, and completing government forms. It helps to track accurately the economic activities of businesses and provides valuable information for government agencies and researchers. It also allows for easier comparison between different companies in the same industry.
It is compulsory if you are setting up a company because; without a SIC code, it could result in fines or penalties and it helps to classify the nature of your business.
How to find your SIC Code?
To determine your SIC code, you can use the full list of codes provided by the Office for National Statistics. This list is updated regularly to reflect changes in industries and includes detailed descriptions of each code. Alternatively, you can also search for your SIC code on the Companies House website by entering keywords related to your business activities.
What is the SIC Code Limit?
There is no limit to the number of SIC codes a company can have. A business may have multiple SIC codes if it engages in various economic activities or operates in different industries. However, the primary code should always reflect the main activity of the company.
Regardless if it`s non-trading or a dormant company, you still need 1 sic code per entity and they are 74990 and 99999 respectively.
Can I Change my SIC Code?
Yes, you can change your SIC code if there is a genuine reason for the change, such as a significant shift in your business activities or not having reached the 4 codes limit and a new activity occurred on your business.
However, this should be done through an official notification to Companies House and may require supporting documentation. It is essential to keep your SIC code up to date to accurately reflect your business's nature and avoid any potential issues with government agencies.
In conclusion, SIC codes play a critical role in classifying businesses and their economic activities in the UK. They are essential for setting up a company and should be regularly reviewed and updated to accurately reflect any changes in business operations. By understanding the purpose and importance of SIC codes, companies can ensure compliance with government regulations and make informed decisions based on industry-specific data.