A statutory cost is a cost that a business is legally required to pay or comply with under legislation or regulation. These are not optional business expenses; they arise because of legal obligations placed on the business. Common examples for UK businesses include:
Employment-related statutory costs
- Employer's National Insurance Contributions (NICs)
- Workplace pension contributions under auto-enrolment
- Statutory Sick Pay (SSP)
- Statutory Maternity, Paternity, Adoption and Shared Parental Pay
- Apprenticeship Levy (for larger employers)
Tax and regulatory costs
- VAT (where applicable)
- Business rates
- Corporation Tax
- PAYE administration
- Land and Buildings Transaction Tax (LBTT) on property purchases in Scotland
Compliance and licensing costs
- Food hygiene registrations and inspections (where applicable)
- Alcohol licences
- Taxi/private hire licences
- Waste disposal obligations
- Health and safety compliance costs
- Fire risk assessments
- Gas safety certificates
- Electrical inspection certificates (where legally required)
- PVG checks where legislation requires them
Industry-specific statutory costs
Depending on the sector, there may be additional legal requirements such as:
- Care Inspectorate registration fees
- Construction Industry Scheme (CIS) compliance
- Environmental permits
- FCA authorisation fees for regulated financial activities
