Every step to start a business in the UK — from choosing a structure to registering, sorting tax, and getting ready to trade. Tick as you go; your progress saves automatically.
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Sixteen steps across four stages. Get the structure decision right first — it shapes your tax, admin and paperwork for everything that follows.
1
Decide your structure
2
Register the business
3
Tax and National Insurance
4
Get ready to trade
Your first year: the key dates
Starting out means a handful of deadlines that are easy to miss when you’re focused on actually winning work. Here’s the rough shape of a sole trader’s first year — a limited company has its own Companies House and Corporation Tax dates on top.
When you start
Begin trading. Keep records from day one — every invoice and expense.
By 5 October
Register for self-assessment by 5 October following the tax year you started.
As you grow
Watch the VAT threshold — £90,000 rolling turnover means you must register within 30 days.
31 January
First self-assessment filing and payment deadline, for the previous tax year.
Ongoing
Set tax aside from every payment, since nothing is deducted at source.
The biggest first-year trap is treating all your income as yours to spend — tax isn’t taken automatically, so a separate pot for it from day one prevents a painful January.
Sole trader vs limited company at a glance
The structure choice shapes everything that follows. Neither is universally better — it depends on your profit level, how much admin you’ll tolerate, and whether limited liability matters to you.
Sole trader vs limited company
Setup
Sole trader: register with HMRC. Ltd: incorporate at Companies House
Tax
Sole trader: Income Tax + NI on profit. Ltd: Corporation Tax + salary/dividends
Admin
Sole trader: lighter. Ltd: annual accounts, confirmation statement, more filing
Liability
Sole trader: personal. Ltd: limited to the company
First choose a structure — most start as a sole trader (register with HMRC for self-assessment) or set up a limited company (incorporate at Companies House and register for Corporation Tax). Then sort business banking, bookkeeping, tax, pricing and insurance. The structure decision comes first because it shapes your tax and admin for everything else.
Should I be a sole trader or limited company?
Sole trader is simpler and suits lower profits or just starting out; a limited company can be more tax-efficient at higher profits and limits personal liability, but means more admin and filing. There’s no universal answer — it depends on your profit level, appetite for paperwork, and whether liability protection matters. Compare both at your profit level.
When do I register with HMRC?
As a sole trader, register for self-assessment by 5 October following the tax year you started trading. A limited company registers for Corporation Tax with HMRC after incorporating at Companies House, usually within three months of starting to trade. Registering late risks penalties, so don’t leave it.
Do I need to register for VAT when starting?
Only once your VAT-taxable turnover nears the £90,000 threshold over a rolling 12 months, or you expect to breach it within 30 days. Many new businesses start below it and register later. You can register voluntarily from the start if your clients are VAT-registered and you have VATable costs to reclaim.
How much should I set aside for tax?
Since tax isn’t deducted at source, set aside a percentage of every payment into a separate pot — many self-employed people reserve around 25–30% to cover Income Tax and National Insurance, more at higher profits. Working out your expected bill early, then saving toward it monthly, avoids a nasty surprise at the self-assessment deadline.
Do I need a business bank account?
A limited company legally needs its own bank account, as it’s a separate legal entity. A sole trader isn’t legally required to have one, but separating business and personal finances is strongly advised — it makes bookkeeping, tax returns and tracking profit far cleaner, and looks more professional to clients.
How this checklist is built
The steps follow current HMRC, Companies House and GOV.UK guidance for starting a business, linking to the free Calclens calculators useful at each stage. Your obligations depend on your structure and circumstances. See our methodology.
Not financial or legal advice. This checklist is a general guide to setting up a business. The right structure and obligations depend on your circumstances — consider an accountant for your specific position.
