Starting a business in the UK is straightforward when you know the steps. Here is everything you need to do.
Step 1: Choose Your Structure
Sole trader: Simplest option. Trade in your own name, pay income tax on profits through Self Assessment. Personally liable for business debts.
Limited company: A separate legal entity. Pays Corporation Tax on profits (25% above 250,000 pounds, 19% for smaller profits). Better asset protection but higher administration.
Step 2: Register
Sole trader: Register for Self Assessment with HMRC by 5 October in your second year of trading.
Limited company: Register with Companies House online. Fee is 12 pounds. You need a UK registered address and at least one director.
Step 3: Tax Setup
Register for VAT if taxable turnover will exceed 90,000 pounds per year. Open a dedicated business bank account.
Step 4: Legal Obligations
Check whether your sector requires licences or registrations. Food businesses need local authority registration. Financial services need FCA authorisation.
Step 5: Insurance
Public liability insurance is essential for most businesses. Employer liability insurance is compulsory if you have staff.
