Formation · 6 min read
What a UK subsidiary actually costs
An itemised first-year budget for a UK subsidiary of an overseas company: government fees (Companies House £50, confirmation statement £34), formation, registered office, bank, VAT, payroll, bookkeeping, accounts and corporation tax. What is in our £1,950 Launch fee and what is not, and where the hidden costs are.
Key points
- Government fees are small: £50 to incorporate, £34 a year for the confirmation statement, £0 for VAT and PAYE registration.
- Our Launch package is £1,950 one-off: formation, twelve months’ registered office, Revolut Business set-up, VAT assessment, Corporation Tax registration and an onboarding call.
- A trading subsidiary with a couple of staff typically costs £9,000–£20,000 a year to run properly, before salaries and tax.
- The hidden costs are penalties for missed filings, VAT registered too late, and audits nobody planned for.
Government fees
| Item | Fee |
|---|---|
| Companies House incorporation (online) | £50 |
| Confirmation statement, annual | £34 |
| Change of name | £20 |
| Register a UK establishment (branch) | £124 |
| Branch: file the parent’s accounts (OS AA01), annual | £110 |
| Branch: change of name (OS NM01) | £30 |
| Voluntary strike-off (DS01) | £33 |
| VAT, PAYE, EORI, Corporation Tax registration | £0 |
| Companies House identity verification via ACSP | £0 (our fee covers it) |
What is in the £1,950 Launch fee
Structure advice and a 30-minute call; identity verification for every director and PSC as a Companies House authorised agent; incorporation with articles, registers and share certificates; UTR and Corporation Tax registration; accounting reference date aligned to the group; twelve months’ registered office and director service address with same-day scanning; Revolut Business application prepared, submitted and tracked; a VAT registration assessment; and an onboarding call with the accountant who will run the company. Disbursements — the £50 Companies House fee, courier costs, certified translations if any — are passed through at cost. Nothing else is added.
Bought individually the same items are £950 + £350 + £450 = £1,750 before VAT assessment and onboarding, which is where the 15–25% package saving comes from. Pricing.
First-year running costs, three scenarios
| Item | Dormant / holding | Services subsidiary, 2 staff | E-commerce importer, 5 staff |
|---|---|---|---|
| Registered office and compliance | £450 / yr | Included | Included |
| Bookkeeping, accounts, CT600, VAT | — | Establish from £750 / mo | Establish from £750 / mo |
| Payroll | — | From £95 / mo | From £250 / mo |
| VAT registration and EORI | — | Included / £350 | £350 (customs set-up) |
| Intercompany agreement | — | £1,200 one-off | £1,200 one-off |
| Management accounts | — | Optional | Embedded from £1,500 / mo |
| Audit (if group not small) | — | £6,000–£15,000 | £8,000–£20,000 |
| Typical year-one total (ex tax and salaries) | About £2,400 with Launch | About £13,000–£15,000 | About £22,000–£40,000 |
What the government will take
Corporation tax at 25% of profit for almost every subsidiary of an established group (the 19% rate is diluted by the number of group companies). Employer National Insurance at 15% above £5,000 per employee. VAT at 20% collected from UK customers and paid over. Nothing on dividends leaving the UK. All the UK taxes a subsidiary pays.
Where the money actually goes wrong
Penalties: £150–£1,500 for late accounts, doubling on repeat; £100 upward for late CT600s; interest and points on late VAT. VAT registered late: a non-established business owes VAT from its first UK sale, and if it did not charge it, that 20% comes out of its own margin. Audit: a subsidiary of a non-small group needs one however small it is, and one appointed late costs more. Bank: weeks lost waiting for a high-street decision when a Revolut Business account would have opened in days. A formation-agent company that needs tidying up before anyone can act: typically £650 and a month. Build your own estimate.
Common questions
How much does it cost to set up a UK subsidiary?
What are the ongoing costs of a UK company?
Are there hidden costs?
Do you charge VAT on your fees?
General information for overseas businesses considering the UK, correct to the best of our knowledge at the date shown. Not advice for your specific circumstances — rates and thresholds change, usually each April. Check with us or HMRC before acting on it.