Starting a business in the UK: a practical first-steps guide.

What you need to know

• Check your immigration permission first. Some visas do not allow self-employment — for example, GOV.UK says Student visa holders cannot be self-employed. Other visas have their own conditions.
• Most businesses start as a sole trader or a limited company. You can change later; GOV.UK says it is usually easier to move from sole trader to limited company.
• As a sole trader you can start trading straight away, but you must register for Self Assessment if you earn more than £1,000 in a tax year (6 April to 5 April).
• A limited company is registered with Companies House. Registering online costs £100 and is usually done within 24 hours; directors may need to verify their identity first.
• You must register for VAT if your taxable turnover goes over £90,000 in 12 months, or you expect it to in the next 30 days.
• Some businesses need licences (for example selling food, alcohol, street trading or playing music), and you must have employers' liability insurance as soon as you employ someone.

Step by step

1. 1

   Check you are allowed to run a business

   Look at the 'what you can and cannot do' section for your visa on GOV.UK and the conditions on your eVisa. If self-employment is not allowed, do not start trading — it can affect your future applications. If in doubt, get advice from a regulated immigration adviser.

2. 2

   Test your idea before spending money

   Talk to at least 10 potential customers. Ask what they use now, what they pay, and what annoys them. Check local competitors and their prices. If you can, take a few real orders or bookings before buying stock or equipment.

3. 3

   Work out your costs and prices

   List one-off costs (equipment, registration, website, first stock) and monthly costs (rent, phone, insurance, transport, software, materials). Set a price that covers costs and pays you. Keep separate personal emergency savings.

4. 4

   Choose your business structure

   Sole trader: simplest, you keep the profits after tax but you are personally responsible for all business debts. Limited company: legally separate from you, liability limited to your investment, but more rules for accounts and taking money out. Partnership: you share responsibility and profits with partners.

5. 5

   Choose a name and check it

   Sole traders can use their own name or a trading name. For a limited company, GOV.UK sets rules on names; search the Companies House register to check a name is not already used.

6. 6

   Register with HMRC or Companies House

   Sole trader: register for Self Assessment once you earn more than £1,000 in a tax year — GOV.UK sets a 5 October deadline after the end of the tax year, and late registration can mean a penalty. Limited company: register with Companies House (£100 online), and you will usually be set up for Corporation Tax at the same time.

7. 7

   Check licences, insurance and data rules

   Use the GOV.UK licence finder for your type of business and area. Get employers' liability insurance before anyone works for you. Consider public liability or other cover if clients or venues ask for it. If you handle customers' personal data, check the data protection rules, including whether you need to pay the ICO data protection fee.

8. 8

   Set up records and a business bank account

   Keep every receipt and invoice from day one. A separate business bank account keeps your records clear and makes your tax return much easier. A limited company's money belongs to the company, not to you.

9. 9

   Get free support

   In England, the Business Support Service gives free advice on 0800 998 1098 (Monday to Friday, 9am to 6pm). Scotland, Wales and Northern Ireland have their own services. A government-backed Start Up Loan of £500 to £25,000 is available if you meet the criteria — it is a personal loan you must repay.

Common mistakes and warnings

Frequently asked questions

Official resources

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