Home Blog Property Sourcer News Understanding the Correct SIC Codes for Property Sourcing and Other Activities
Understanding the Correct SIC Codes for Property Sourcing and Other Activities

Understanding the Correct SIC Codes for Property Sourcing and Other Activities

Introduction

Choosing the correct SIC Codes for Property Sourcing – Standard Industrial Classification (SIC) is crucial for property sourcers and related businesses. SIC codes classify your business activities for regulatory, tax, and compliance purposes. Using the wrong SIC code can lead to compliance issues, financial penalties, and misrepresentation of your business.

What is a SIC Code?
SIC codes are numerical codes assigned to businesses to classify their primary activities. They are used by government agencies, financial institutions, and regulatory bodies for statistical analysis, compliance, and tax purposes. Every limited company and some other business structures in the UK must provide a SIC code when registering with Companies House.

Correct SIC Codes for Property Sourcing

In this blog, we will guide you through the correct SIC codes for property sourcing and other property-related activities, helping you ensure your business is accurately classified and compliant with all regulations.


Section 1: What are SIC Codes?

What are SIC Codes?

Standard Industrial Classification (SIC) codes are numerical codes assigned to businesses to classify their primary activities. These codes are used by government agencies, financial institutions, and regulatory bodies to identify and categorize businesses based on their operations. SIC codes play a critical role in ensuring that businesses are correctly classified for regulatory compliance, statistical analysis, and tax purposes.

For property sourcers and related businesses, selecting the right SIC code is essential to accurately represent your activities and avoid potential legal and financial issues. Understanding and using the correct SIC codes can streamline compliance, enhance business credibility, and provide clarity in official records.


Section 2: The Correct SIC Code for Property Sourcing

The Correct SIC Code for Property Sourcing

For property sourcers, the correct SIC code to use is 68310. This code is designated for “Real estate agencies,” which encompasses activities such as property sourcing, buying, selling, and letting real estate on a fee or contract basis. Using SIC code 68310 ensures that your business is classified correctly under estate agency regulations, providing clarity and compliance with industry standards.

Using the correct SIC code is essential to avoid misclassification, which can lead to compliance issues and potential penalties. It also helps in maintaining transparency and trust with regulatory bodies and clients.


Section 3: Commonly Misused SIC Codes

Commonly Misused SIC Codes

A common mistake among property sourcers is using the wrong SIC code, such as 82990, which is for “Other business support service activities not elsewhere classified.” While it might seem applicable, it does not accurately represent property sourcing activities and can lead to significant issues:

  1. Compliance Issues: Misclassification can result in failing to meet specific industry regulations, leading to fines or penalties.
  2. Insurance Problems: Incorrect SIC codes can affect your insurance coverage, as policies may not cover activities not explicitly listed.

For accurate classification and to avoid these problems, always use SIC code 68310 for property sourcing.


Section 4: Other Relevant SIC Codes for Property Activities

Other Relevant SIC Codes for Property Activities

In addition to property sourcing (68310), other property-related activities require different SIC codes to accurately reflect their operations:

  • 68100 – Buying and Selling of Own Real Estate: Use this code if your business involves purchasing and selling properties you own.
  • 68209 – Other Letting and Operating of Own or Leased Real Estate: This code applies to businesses managing or leasing properties.
  • 68320 – Management of Real Estate on a Fee or Contract Basis: For businesses that manage properties on behalf of clients.

Selecting the appropriate SIC code ensures your business is accurately represented and compliant with industry standards.


Section 5: Benefits of Correct SIC Code Usage

Benefits of Correct SIC Code Usage

Using the correct SIC code for your property business offers several key benefits:

  1. Improved Compliance: Ensures your business meets all regulatory requirements, reducing the risk of fines or legal issues.
  2. Accurate Business Representation: Reflects your business activities accurately in official records, enhancing credibility and trust with clients and regulatory bodies.
  3. Better Insurance Coverage: Ensures your insurance policies cover all aspects of your operations, providing comprehensive protection.
  4. Enhanced Tax Planning: Facilitates more accurate tax planning and financial management, potentially leading to cost savings.

Section 6: How to Change Your SIC Code

How to Change Your SIC Code

If you realize that your business is using the incorrect SIC code, it’s important to update it to ensure compliance and accurate classification. Here’s a step-by-step guide to changing your SIC code with Companies House:

  1. Review Your Current SIC Code: Verify the SIC code currently registered for your business.
  2. Identify the Correct SIC Code: Determine the appropriate SIC code that accurately reflects your business activities (e.g., 68310 for property sourcing).
  3. Update Your Annual Return: When filing your next annual return (Confirmation Statement), update the SIC code section with the correct code.
  4. Notify Companies House: If you need to make changes outside the annual return period, you can update your SIC code by filing the appropriate forms through Companies House’s online services.

Ensuring your SIC code is accurate will help maintain compliance and accurate business representation.


Conclusion

Choosing the correct SIC code for your property business is essential for ensuring compliance, accurate representation, and comprehensive protection. By using the appropriate code, such as 68310 for property sourcing, you can avoid potential legal and financial issues, improve your business’s credibility, and streamline your operations.

Take the time to review and update your SIC code if necessary, and enjoy the benefits of proper classification. For more guidance on property sourcing compliance and SIC codes, explore our resources at Sourcing Investments.


FAQs

What is a SIC code?
SIC codes are numerical codes used to classify business activities. They help government agencies, financial institutions, and regulatory bodies to identify and categorize businesses for compliance, tax, and statistical purposes.

Who needs a SIC code?
Every limited company in the UK, and some other business structures, must provide a SIC code when registering with Companies House. This ensures the business activities are accurately recorded and compliant with regulations.

What is the correct SIC code for property sourcing?
The correct SIC code for property sourcing is 68310, which covers activities related to real estate agencies.

Why is it important to use the correct SIC code?
Using the correct SIC code ensures regulatory compliance, accurate business representation, better insurance coverage, and improved tax planning.

How can I change my SIC code?
You can change your SIC code by updating it in your annual return (Confirmation Statement) or through Companies House’s online services if needed.

What are some other relevant SIC codes for property activities?

  • 68100 for buying and selling real estate.
  • 68209 for letting and operating real estate.
  • 68320 for managing real estate on a fee or contract basis.

Can using the wrong SIC code affect my insurance?
Yes, using an incorrect SIC code can result in inadequate insurance coverage, as the policy may not cover all your business activities.


Need to get compliant? Click here to learn how you can get property compliant in minutes and get started finding amazing properties for investors!

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Thanks for reading

Chris Dowty

CEO, Sourcing Investments

Chris Dowty, Founder and CEO - Sourcing Investments Ltd

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