UK business registration takes little time and low cost. Sole traders start in minutes for free. Limited companies need one day and £12. Pick the right structure first.
Choose Your Business Structure
Decide early. It affects taxes, liability, and setup. Sole trader suits freelancers. Limited company fits growing teams. Partnership works for two or more.
| Structure | Setup Cost | Liability | Taxes | Best For |
|---|---|---|---|---|
| Sole Trader | Free | Personal assets at risk | Income tax + NI | Solo owners, low risk |
| Partnership | Free | Partners share risk | Income tax + NI | Small teams |
| Limited by Shares | £12 online | Limited to shares | Corporation tax | Investors, growth |
| Limited by Guarantee | £12 online | No personal payout | Corporation tax | Non-profits, clubs |
Sole traders report via Self Assessment. Limited companies file annual accounts. Legal Requirements for UK Small Businesses for liability details.
Register as a Sole Trader
Easiest option. No Companies House needed. Register with HMRC only.
- Steps:
- Check name availability on GOV.UK.
- Go to HMRC online service.
- Enter details: name, address, start date.
- Get Unique Taxpayer Reference (UTR) in 10 days.
Time: 10 minutes. Cost: Free. You handle all taxes personally. Register for Self Assessment by October 5 after start.
Common question: Do I need to register my business name? No, unless trading under different name. Then notify local council. How to Budget for a UK Small Business for tax planning.
Set Up a Partnership
Two or more people share ownership. Agree terms in writing.
- Steps:
- Choose name and check it.
- Register each partner with HMRC.
- Draft partnership agreement (use templates).
- Register for Self Assessment.
Time: One day. Cost: Free. Each pays income tax on share. Nominate one for tax returns.
Register a Limited Company
Forms a separate legal entity. Protects personal assets.
- Steps:
- Choose unique name. Check on Companies House.
- Pick SIC code for industry.
- Appoint directors and shareholders.
- Decide registered office address.
- File online via Companies House WebFiling.
- Pay £12. Get certificate in 24 hours.
Documents needed: Memorandum, articles of association (auto-generated). PSC register if people control over 25%.
Time: 24 hours. Cost: £12 online, £40 paper, £100 same day.
Handle VAT Registration
Turnover over £90,000? Register for VAT. Voluntary below that for reclaiming.
- Steps:
- Apply on HMRC site after business start.
- Choose scheme: Standard or Flat Rate.
- File quarterly returns.
Time: Instant approval. Keeps you legal. UK Small Business Invoice for VAT invoicing.
Register for Data Protection
ICO handles GDPR. Most businesses need it.
- Steps:
- Check if you process data.
- Pay £40-£2,900 fee based on size.
- Get number in days.
Time: 5 minutes online. Renew yearly.
Open a Business Bank Account
Required for limited companies. Sole traders optional but smart.
- Pick banks like Starling or HSBC.
- Need ID, proof of address, registration docs.
- Separate finances for easy taxes.
- Cash Flow Tips for UK Small Businesses for account choices.
Checklist for All Registrations
Print this list:
- [ ] Pick structure.
- [ ] Check name.
- [ ] Register with HMRC/Companies House.
- [ ] Get UTR or company number.
- [ ] VAT if needed.
- [ ] ICO registration.
- [ ] Bank account.
- [ ] Insurance quotes.
- [ ] Accountant setup.
Track deadlines. Use free HMRC webinars.
Common question: How long to register a company? 24 hours online. Same day for £100.Small Business Mistakes to Avoid in the UK for name errors.
Costs Breakdown
| Item | Sole Trader | Limited Company |
|---|---|---|
| Registration | £0 | £12 |
| VAT | £0 unless voluntary | £0 unless threshold |
| ICO | £40 | £40+ |
| Bank | £0 | £0-£10/month |
| Total Start | Under £50 | Under £100 |
Budget extra for software like FreeAgent.UK Startup Grants for New Businesses for funding help.
After Registration
File Confirmation Statement yearly (£13). Limited companies submit accounts. Sole traders do Self Assessment by January 31. Keep records 6 years. Update changes within 14 days.
Common question: Can I register online? Yes, all via GOV.UK portals. Starting a Small Business in the UK for next steps.
Final Thoughts
Registering a UK business opens doors fast. Sole trader for quick start. Limited for protection. Act within weeks of idea. Check GOV.UK for updates. This sets strong foundations. Grow with free advice next. Category: Small Business Tips for more guides. How to Find Free UK Small Business Advice for support.
