What is A SIC Code?
A SIC (or Standard Industrial Classification) code is a classification system used by Companies House to categorise a company’s main business activities. It is a four or five-digit numerical code for use in Companies House filings.
A SIC code is required to be chosen at the point of company incorporation, although the SIC Code can be amended, in the event of a change in the company’s activities. A company can also choose up to 4 separate SIC codes, if one SIC code is not sufficient to describe the key business activities.
A list of available SIC codes is available on the Companies House website at https://resources.companieshouse.gov.uk/sic/
How can SIC Codes be useful for me?
SIC Codes are a key tool in benchmarking business and financial performance against other similar businesses, who are engaged in the same or very similar business activities. We use this as a key element in our annual performance report when benchmarking your company’s performance against competitors. In this way, we can identify areas your business is performing well in, and other areas which may need more attention. This is then summarised in the Competitor benchmarking report summary.
How SIC Codes Help Business Leaders
SIC codes offer several benefits to business leaders:
- Customer Segmentation: Understanding the SIC codes of customers helps businesses target marketing efforts and tailor products or services to specific industries.
- Market Analysis: By identifying the SIC codes of competitors, businesses can analyze market trends, competition, and potential opportunities.
- Industry Benchmarking: Comparing performance metrics against businesses with similar SIC codes provides valuable benchmarks for improvement.
- Government Regulations: SIC codes determine which regulations and licenses apply to a business, helping ensure compliance.
- Financial Analysis: Investors and lenders often use SIC codes to assess a company’s industry and financial risk.
- Data Analysis: SIC codes facilitate data analysis and reporting, providing insights into industry performance and trends.
How to Find a SIC Code for Your Business
Understanding Your Primary Activity
The first step is to clearly define your business’s primary activity. This is the core function of your business. For example, if you run a restaurant, your primary activity is food service.
Using Companies House
Companies House is a government agency in the UK responsible for registering companies. They provide a condensed list of SIC codes.
- Visit the Companies House website: https://www.gov.uk/government/organisations/companies-house
- Use the SIC code search tool: They offer a search function where you can input keywords related to your business.
- Review the results: The search will provide a list of potential SIC codes. Choose the one that most accurately reflects your business.
Manual Search
If you can’t find a suitable SIC code using the search tool, you can manually browse through the complete list of SIC codes. This can be time-consuming but provides more options.
Considering Multiple SIC Codes
Some businesses might have multiple activities. In such cases, you can select up to four SIC codes to describe your business accurately.
Important Considerations
- Accuracy: Choose the SIC code that most closely matches your business activities.
- Updates: SIC codes might change over time, so it’s essential to review them periodically.
- Professional Advice: If you’re unsure about the correct SIC code, consider consulting with an accountant or business advisor.