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Sourcing Agents and SIC Codes - What You Need to Know

Why Do You Need a SIC Code For Your Sourcing Business?

Selecting the correct SIC (Standard Industrial Classification) codes for your property business might seem like a small detail, but it’s a key step for sourcing agents and property professionals to ensure legal compliance and smooth operations.

Used to categorise what your business does, SIC codes are essential for registering your company with Companies House in the UK.

If you're sourcing or packaging deals, there's one SIC code you cannot overlook – 68310.

 

What Are SIC Codes and Why Do They Matter?

SIC codes are used by Companies House to classify businesses based on the activities they carry out, and the code you choose could affect how potential partners, investors, or even lenders perceive your company.

For sourcing agents, the relevant SIC code is 68310 – Real Estate Agencies. This classification is essential, as it explicitly shows that you operate as a 'Real Estate Agent' which deal sourcing or property sourcing form a part of.

 

How Many SIC Codes Can a Business Assign?

Businesses are not restricted to only one SIC code. Legally, you can assign up to five relevant SIC codes to reflect the full scope of your operations.

For example, if you run multiple streams within your property business—such as deal packaging, property investing, or property management—you can include a mix of SIC codes that represent these activities.

However, this flexibility comes with a warning. Assigning multiple SIC codes can have implications, some finance providers will not provide finance for a property purchase if going to be held in a company that also trades; sourcing is classed as a trading business.

 

Considerations for Sourcing Agents Before Setting Up

68310 Is a Must for Sourcing Business Activities 

When sourcing property deals or operating as a deal packager, 68310 is non-negotiable. Without this code, you're not classifying your business activities correctly, which could lead to compliance and legal risks.

No matter what any training course may say, this is the ONLY code you can assign for sourcing or deal packaging.

Agents have come to us with all different types of vague SIC codes, with some being told in courses that sourcing isn't covered under a specific code,, so they can use a more 'general' one, such as 82990 - see our post about this here!  Please be warned, this is not true and could land you in trouble if HMRC comes to inspect you as they could see the wrong use of a SIC Code as a deliberate attempt to avoid meeting minimum standards required of an Agent.

 

Impact of Combining Sourcing and Other Property Businesses 

As mentioned above, if you’re already running a property investment business, adding sourcing activities under the same company (and therefore SIC code) comes with risks.

  • High-Risk Perception: Sourcing and deal packaging are considered to be 'trading' activities and high risk when buying and holding real estate under the same company by financial institutions. This could impact your future ability to secure funding for property investments if both activities fall under the same company's umbrella.
  • Interlinked Liability: Combining businesses means risks aren’t separate. If one side of your operations faces challenges (e.g., financial issues, legal disputes), it could directly impact the other.

 

To minimise risk, many professionals opt to keep sourcing activities under a separate company entirely. This additional setup ensures cleaner financials, clearer compliance, and reduced liability.

However, it’s always wise and highly recommended to seek financial, accountancy and legal advice before making this decision.

 

Seeking Financial Advice Early is Crucial

Before applying additional SIC codes to your business, it’s always advisable to consult with a financial advisor, accountant or legal expert. This ensures you:

  • Are compliant with regulations.
  • Avoid unintended, negative impacts on current or future financing.
  • Create a clear delineation between different aspects of your business to reduce overlap and risk.

Attempting to manage everything under one umbrella can lead to complications, especially for sourcing agents who also dabble in property investments.

 

Not Sure What to Do Next?

Are you looking for more clarity on setting up a sourcing business? 

We offer a range of training, including our Complete Sourcing Programme which guides agents through the entire sourcing process, making sure you are setting up and operating compliantly, professionally - and of course - successfully! 

OR for a limited time you can get 30% off our Sourcing Essentials course (not advertised on our website) for just £833 - find out more here. 

You can find out more about our training here, or please do get in touch with our team at [email protected] if you have specific questions you'd like help with.