First Business Steps

Starting a Business Checklist — UK

Last updated: 2026-04-14

Before you start

Before you begin trading, decide on your business structure (sole trader or limited company), choose a name, and understand your basic obligations. You do not need a business plan to register, but having a clear idea of what you will sell and to whom helps you focus.

Register your business

Sole traders register with HMRC for Self Assessment. Limited companies register with Companies House and then with HMRC for Corporation Tax. Both processes can be done online and are relatively straightforward.

Set up your finances

Open a separate bank account for your business income and expenses. This makes record-keeping much easier and is essential for limited companies. Choose a simple bookkeeping method — a spreadsheet or basic accounting software is fine to start.

Understand your tax obligations

Sole traders pay Income Tax and National Insurance through Self Assessment. Limited companies pay Corporation Tax and may need to set up PAYE. Both should be aware of the VAT registration threshold (currently £90,000).

Keep good records from day one

Track every business transaction from the start. Keep receipts, invoices, and bank statements. Set aside time each week to update your records. Good habits now save time and stress later.

Common first-year mistakes

The most common mistakes are: not registering on time, mixing personal and business finances, not keeping receipts, not setting money aside for tax, and not understanding filing deadlines. All of these are avoidable with basic planning.

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Frequently asked questions

Do I need insurance?

It depends on your business type. Public liability insurance is recommended if you work with clients face-to-face. Professional indemnity insurance is important for consultants and advisers. Employers liability insurance is legally required if you have employees.

Do I need to register with the ICO?

If your business handles personal data (most do), you may need to register with the Information Commissioner's Office. The fee is usually £40 per year for small businesses.

When should I think about VAT?

You must register for VAT if your taxable turnover exceeds £90,000 in a 12-month period. You can also register voluntarily below this threshold, which can be beneficial if your customers are VAT-registered businesses.

How do I find an accountant?

Ask other business owners for recommendations, check professional bodies like ACCA or ICAEW, or search online. Many accountants offer a free initial consultation.

Want the full roadmap?

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Based on official guidance from:

Important

The information on this page is based on publicly available UK government guidance and is intended for general educational purposes. Rules can change, and your specific situation may differ. Always check the latest guidance on GOV.UK or speak to a qualified professional before making decisions.

Last updated: 2026-04-14