How to start
a business in the UK.

Not immediately. You can earn up to £1,000 of gross trading income in a tax year under the trading allowance without registering. Above that you need to register for Self Assessment by 5 October following the tax year you went over. The £1,000 is measured on income before expenses, not profit, which catches people out.

Registering as a sole trader with HMRC is free. Incorporating a limited company online at Companies House costs £100, and a company then pays £50 a year to file its confirmation statement online. Everything past that (insurance, stock, tools, an accountant) depends entirely on what you're doing.

Neither is better in general, which is why the question keeps getting asked. Sole trader is simpler, cheaper and keeps your details off a public register. A limited company gives you limited liability and can be more tax-efficient at steadier profits, in exchange for annual accounts, a confirmation statement, Corporation Tax and public filings. Where the crossover sits depends on your profit, how you take money out and how much risk you carry; an accountant will answer it properly for your numbers in far less time than working it out yourself.

When your taxable turnover across any rolling 12 months goes over £90,000, or when you expect to pass £90,000 in the next 30 days on its own. It's a rolling test rather than a tax-year one, which is the part people miss. You then have 30 days from the end of the month you crossed in to register. You can also register voluntarily below the threshold, which sometimes makes sense if your customers are themselves VAT-registered businesses.

On profits in 2026/27: nothing on the first £12,570, then 20% up to £50,270, 40% to £125,140, and 45% above that. On top of the Income Tax, Class 4 National Insurance is 6% on profit between £12,570 and £50,270, then 2% above. Those are the England, Wales and Northern Ireland figures; Scotland sets its own income tax bands.

No, and this gets reported wrongly a lot. If your profit is £7,105 or more, Class 2 is treated as paid: you get the National Insurance record towards your State Pension without a bill. Below that you owe nothing either, but you can choose to pay it voluntarily at £3.65 a week to keep your record complete. Class 2 wasn't abolished; it stopped being compulsory, and the difference matters if you're relying on those years counting.

Register by 5 October following the tax year you started. Paper returns by 31 October; online returns and payment by 31 January. If you'd rather the bill came out through your PAYE code, file by 30 December. And if you're making payments on account, the second one lands on 31 July.

Payments on account. If your Self Assessment bill is £1,000 or more, and less than 80% of your tax was already collected at source, HMRC asks you to pay towards next year's bill in advance: two instalments on 31 January and 31 July, each usually half of last year's bill. So the first January can arrive as roughly 150% of the tax you'd budgeted for. It isn't a penalty and it isn't an error, but it ends a lot of promising first years badly. Put the money aside.