How to Start a Business in the UK 2026

A complete, step-by-step guide to everything you need to do to start a business in the UK — from choosing a structure and registering with HMRC to hiring your first employee and protecting your ideas.

Step 1 — Choose Your Structure & Register

The foundation: decide how you will trade and register with the right authorities

Business Structures

Sole trader vs limited company vs partnership — which is right for you?

Register as Self-Employed

HMRC registration, UTR number, Self Assessment — step-by-step guide for sole traders.

Company Formation

Register a limited company at Companies House — £12 online, done in minutes.

Step 2 — Plan & Fund Your Business

Write a solid plan and secure the funding you need to get started

Business Plans

Market analysis, financial projections, objectives — how to write a plan that works.

Start-up Finance

Start Up Loans, Growth Guarantee Scheme, business bank accounts, and alternative finance.

Business Banking

Starling, Tide, Monzo, NatWest — which account is right for your business?

Step 3 — Sort Your Tax & Legal Obligations

Know what you owe, when you owe it, and how to stay compliant

VAT

£90,000 threshold. Flat Rate Scheme. MTD for VAT.

Corp. Tax

19/25% rates. CT600. AIA. Director salary strategy.

MTD

Making Tax Digital. VAT mandatory now. ITSA from 2026.

All Tax & Legal

GDPR, IR35, intellectual property, accountants.

Step 4 — Grow & Protect Your Business

Marketing, staff, insurance, and operations once you are up and running

Marketing & Sales

Google Ads, social media, SEO, AI tools, and e-commerce.

Hiring Staff

PAYE, employer NI, auto-enrolment, contracts, and employer liability insurance.

Insurance & Protection

EL, PL, professional indemnity, cyber, and intellectual property.

Starting in tough economic times?

Some of the world's best businesses started during recessions. Learn how to keep overheads lean, manage cash flow, and build a resilient business model from day one.

Starting in tough times →

Frequently Asked Questions

Decide on your business structure (sole trader, partnership, or limited company) — this affects how you register, what tax you pay, and your personal liability. Most people starting out choose sole trader for simplicity. Then register with HMRC: sole traders register for Self Assessment; limited companies register at Companies House.

It varies enormously by business type. A sole trader can start for almost nothing — there is no registration fee for self-employment, and the £1,000 Trading Allowance means you only need to register once you earn above that. A limited company costs £12 to incorporate online at Companies House. The main costs are usually equipment, marketing, professional fees, and insurance.

You must register as self-employed with HMRC if your self-employment income exceeds £1,000 in a tax year (the Trading Allowance). Registration is free and done online via the Government Gateway. The deadline is 5 October following the end of the tax year you started. You will receive a UTR number by post within 10 working days.

A sole trader is the simplest structure — you are the business, personally liable for all debts, and pay Income Tax on profits via Self Assessment. A limited company is a separate legal entity — your personal assets are protected from business debts, but there is more administration (Companies House filing, Corporation Tax returns). Limited companies are often more tax-efficient once profits exceed around £30,000–£40,000.

Sole traders pay Income Tax (20%/40%/45% after the £12,570 personal allowance) and Class 4 National Insurance (8% on profits £12,570–£50,270) via Self Assessment. Limited companies pay Corporation Tax (19% on profits up to £50,000; 25% above £250,000). Both may need to register for VAT once turnover exceeds £90,000.