Step-by-step guide to starting a new business in the UK, including legal, financial, and practical steps:

1. Decide on a Business Idea

• Identify your niche, target market, and value proposition.
• Conduct market research to assess demand, competition, and pricing.

2. Choose the Right Legal Structure: There are several options, each with pros and cons. Consult a professional if unsure about the best structure.

Sole Trader

• Easiest to set up.
• You keep all profits but are personally liable for debts.

Limited Company (Ltd)

• Separate legal entity; limited liability.
• Requires more admin (e.g., annual accounts, tax returns).

Partnership

• Shared ownership and responsibility.
• Must register as a partnership and each partner registers for self-assessment.

3. Choose a Business Name

• Must be unique and non-offensive.
• For limited companies, check name availability at Companies House.
• Avoid names too like existing businesses or trademarked names. Check at UK IPO.

4. Register Your Business

Sole Trader

• Register online with HMRC for Self Assessment: https://www.gov.uk/set-up-sole-trader

Limited Company

• Register with Companies House online: https://www.gov.uk/register-a-company-online
• Provide:
  • Company name
  • Registered address
  • Details of directors and shareholders
  • Memorandum and articles of association

Partnership

• Register the partnership with HMRC.
• Designate a “nominated partner” to manage tax returns.

5. Set Up Business Finances

• Open a business bank account (required for limited companies).
• Set up accounting or bookkeeping systems.
  • Consider tools like QuickBooks, Xero, or FreeAgent.
• Keep clear records for income, expenses, and taxes.

VAT

• You must register for VAT if turnover exceeds £90,000 (2024/25 threshold).
• You can register voluntarily if below the threshold, which may be beneficial.

6. Understand Tax Obligations

Sole Traders & Partnerships

• File an annual Self Assessment tax return.
• Pay Income Tax and National Insurance.

Limited Companies

• Pay Corporation Tax on profits.
• Directors file Self Assessment for personal income.
• Submit annual accounts and a Confirmation Statement to Companies House.

7. Apply for Licences and Permits (If Required) Depending on your business type:

• Food businesses – register with local authority.
• Trades – may need specific certifications or insurance.
• Home-based businesses – check for local restrictions.

Search here: https://www.gov.uk/licence-finder

8. Get the Right Insurance, Some insurance may be legally required:

• Employers’ liability insurance (if you have staff).
• Public liability insurance (e.g., for retail or trades).
• Professional indemnity insurance (if you give advice).

9. Hire Employees (Optional)

• Register as an employer with HMRC.
• Run PAYE payroll.

Meet obligations like; National Minimum Wage, Workplace pension (auto-enrolment) and Health and safety compliance

10. Protect Your Business

• Consider trademarking your brand name or logo.
• Register your domain name early.
• Understand GDPR rules for handling customer data.
• Draft contracts or service agreements if needed.

11. Promote Your Business

• Build a website – consider platforms like WordPress, Wix, or Shopify.
• Create social media profiles (LinkedIn, Instagram, Facebook, etc.).
• Set up Google Business Profile for visibility in local searches.
• Use both online marketing (SEO, ads) and offline tactics (flyers, networking).

12. Keep Up with Ongoing Obligations

• File taxes and returns on time (Companies House, HMRC).
• Maintain financial records.
• Update business details with Companies House if they change.