How to Register a Business in the UK: Step-by-Step

Once you’ve decided what to sell and to whom, the next hurdle is making it official. Registering a business in the UK isn’t complicated, but the process differs depending on whether you’re trading as a sole trader or setting up a limited company — and getting the wrong structure, or missing a deadline, can be a costly mistake to unpick later.

This guide walks through both routes step by step, what each one costs, the deadlines that actually matter, and the details people most often get wrong when registering for the first time.

If you’re still weighing up which structure suits your business, we’ll cover that too — but if you already know you’re a sole trader or ready to incorporate, jump straight to the relevant section below.

Quick Answer

To register a business in the UK, sole traders register for Self Assessment with HMRC (free, online, via Government Gateway), while limited companies incorporate with Companies House (from £12 online) and then register separately for Corporation Tax. Most people decide their structure first, then register within weeks of starting to trade.

Key Takeaways

• Sole traders register for Self Assessment with HMRC; limited companies incorporate with Companies House first
• Registering as a sole trader is free; incorporating a limited company starts from around £12–£50 depending on the route
• Sole traders must register by 5 October after the tax year they started trading, to avoid penalties
• Limited companies must register separately for Corporation Tax within 3 months of starting to trade
• A UK-registered office address is required for limited companies, even for non-resident founders

On this page: Choosing Your Business Structure | Registering as a Sole Trader | Registering a Limited Company | Deadlines That Matter | Costs Compared | Illustrative Examples | Common Mistakes | Editor’s Insights | Sole Trader or Limited Company? | Comparison Table | Checklists | FAQ | Sources

Choosing Your Business Structure Before You Register

The two most common UK business structures are sole trader and limited company, and which one you register as determines the entire process that follows.

As a sole trader, you and the business are legally the same entity — simpler to set up, but you’re personally responsible for any business debts. As a limited company, the business is a separate legal entity from you, offering limited liability, but with more ongoing paperwork and reporting.

Partnerships sit between the two: two or more people share responsibility for a business, similar to sole trading but split between partners, each registering individually with HMRC alongside the partnership itself.

Most people starting small, low-risk businesses register as sole traders first and consider incorporating later once profits grow — there’s no requirement to get this exactly right on day one.

How to Register as a Sole Trader

Registering as a sole trader means registering for Self Assessment with HMRC, which you can do entirely online in about ten to fifteen minutes.

1. Check you actually need to register. If you’ve earned more than £1,000 from self-employment in a tax year, registration is required.
2. Choose your trading name, if you’re not simply trading under your own name. Avoid words like “Limited” or “LLP”, which are reserved for incorporated businesses, and check it isn’t already trademarked.
3. Go to GOV.UK and register for Self Assessment as a sole trader, using your Government Gateway details, or creating them if this is your first time.
4. Provide your National Insurance number and personal details, along with your business start date.
5. Wait for your Unique Taxpayer Reference (UTR), which HMRC posts to you after registration — this is what you’ll use to file your tax return each year.
6. Open a separate business bank account. It isn’t legally required for sole traders, but it makes bookkeeping considerably easier from day one.

Editor’s Insight: Register close to when you actually start trading, not months before. Registering too early can trigger a tax return request for a period when your business did nothing at all — extra admin for no reason.

How to Register a Limited Company

Registering a limited company means incorporating with Companies House first, then separately registering for Corporation Tax with HMRC.

1. Choose a company name that’s unique, ends in “Limited” or “Ltd”, and doesn’t use restricted or offensive words. Check availability on the Companies House register.
2. Decide on your company’s structure, including at least one director and, usually, at least one shareholder — a sole director and sole shareholder can be the same person.
3. Provide a UK-registered office address. This is where official correspondence is sent, and it must be a physical UK address, though it doesn’t have to be where you actually work.
4. Register with Companies House online, which is the fastest and cheapest route, typically completed within 24 hours once submitted correctly.
5. Receive your Certificate of Incorporation, confirming your company legally exists, along with your company registration number.
6. Register separately for Corporation Tax with HMRC, within 3 months of starting to trade — this doesn’t happen automatically alongside incorporation.
7. Open a business bank account. Unlike sole traders, limited companies must keep business finances entirely separate from personal ones.

Editor’s Insight: Incorporating with Companies House and registering for Corporation Tax are two separate steps. Plenty of new directors assume one covers the other, then miss the Corporation Tax deadline entirely.

Deadlines That Actually Matter

Missing a registration deadline is one of the most common — and most avoidable — costly mistakes for new business owners.

• Sole traders must register for Self Assessment by 5 October following the end of the tax year in which they started trading (for example, starting in August 2025 means registering by 5 October 2026).
• Limited companies must register for Corporation Tax within 3 months of starting to trade, which is often earlier than people expect if incorporation and trading happen close together.
• VAT registration becomes mandatory once your taxable turnover exceeds £90,000 in any rolling 12-month period, regardless of business structure, with notification required within 30 days of crossing the threshold.

Editor’s Insight: The VAT threshold is measured on a rolling 12-month basis, not your accounting year. Check your total turnover monthly if you’re anywhere near £90,000, rather than only reviewing it at year-end.

Costs Compared: Sole Trader vs Limited Company

Registering as a sole trader is free, while incorporating a limited company typically costs from around £12 for the cheapest online option through Companies House, with some formation agents charging more for additional services.

Beyond the initial registration fee, limited companies also carry ongoing costs that sole traders don’t — filing annual accounts and confirmation statements with Companies House, and generally higher accountancy fees given the extra reporting involved. Sole traders, by comparison, only need to file a Self Assessment return each year.

Illustrative Examples

Real-World Scenario — Freelancer registering as sole trader: A freelance copywriter starts taking on paid clients in July. Once earnings pass £1,000 for the tax year, they register for Self Assessment online, receive their UTR by post a few weeks later, and open a separate business bank account to keep client payments clearly tracked.

Real-World Scenario — Two founders incorporating together: Two friends launching a small software consultancy choose to incorporate as a limited company from the outset, given plans to bring in investment later. They register with Companies House as co-directors and shareholders, then register separately for Corporation Tax within the three-month window once they start invoicing clients.

Illustrative Example — Growing past the VAT threshold: A sole trader running a small online shop tracks their rolling 12-month turnover monthly using a simple spreadsheet. When it crosses £90,000 in March, they notify HMRC within 30 days and register for VAT, avoiding the backdated liability and penalties that come with late registration.

Common Mistakes

1. Registering with the wrong structure for the wrong reason — incorporating purely because it “sounds more professional” without weighing the extra admin and cost can be more hassle than it’s worth for a small, low-risk business.
2. Missing the Self Assessment deadline — registering after 5 October following your first tax year can trigger a penalty, even if you owe little or no tax.
3. Assuming Companies House registration includes Corporation Tax — it doesn’t; this is a separate registration with HMRC that new directors frequently overlook.
4. Not checking name availability properly — a name might be available at Companies House but already trademarked elsewhere, risking a dispute later.
5. Mixing personal and business finances from day one — this is technically allowed for sole traders, but it makes bookkeeping, tax calculations, and eventually incorporating far harder than starting with a separate account.

Editor’s Insights

• There’s no legal requirement to get your business structure “right” immediately — most sole traders can convert to a limited company later without losing momentum or clients.
• Registering early costs you nothing extra as a sole trader, but registering too early (before you’ve actually started trading) creates unnecessary tax return obligations.
• A UK-registered office address for a limited company can be a formation agent’s address or an accountant’s office — it doesn’t need to be your home address if privacy is a concern.
• Keep a simple record of every registration reference number (UTR, company number, VAT number) in one place; they’re easy to lose track of once you’re juggling more than one.
• If you’re unsure whether a specific activity counts as “trading” yet, err on the side of registering — the downside of registering slightly early is minor compared with a missed deadline.

Sole Trader or Limited Company? A Quick Framework

If you’re still deciding which structure to register as, use this as a starting point:

• Choose sole trader if: you’re testing a business idea, expect modest and steady profits, and want the simplest possible admin
• Choose limited company if: you want personal liability protection, plan to bring in investors, or expect profits to grow well beyond what you personally need to draw as income
• Either way: you can change structure later as circumstances change — this decision doesn’t need to be permanent

Sole Trader vs Limited Company Registration

Registration Checklist

• [ ] Decided on sole trader, partnership, or limited company structure
• [ ] Chosen and checked availability of your business or company name
• [ ] Gathered National Insurance number (sole trader) or director/shareholder details (limited company)
• [ ] Arranged a UK-registered office address if incorporating
• [ ] Registered within the correct deadline for your structure

Post-Registration Checklist

• [ ] Opened a separate business bank account
• [ ] Set up basic bookkeeping or accounting software
• [ ] Noted your UTR, company number, or VAT number somewhere secure
• [ ] Checked whether you need any licences, insurance, or council registrations
• [ ] Diarised your Self Assessment or Corporation Tax filing deadlines

FAQ

How much does it cost to register a business in the UK? Registering as a sole trader is free; incorporating a limited company typically starts from around £12 online through Companies House, with formation agents sometimes charging more for added services.

How long does it take to register a business in the UK? Sole trader registration is usually completed online within ten to fifteen minutes, while limited company incorporation is often approved within 24 hours once your application is submitted correctly.

Do I need to register a business if I’m just selling as a side hustle? Yes — if you earn more than £1,000 from self-employment in a tax year, you must register for Self Assessment, regardless of whether it’s a side hustle or your main income.

Can I register a business in the UK if I don’t live there? Yes — non-UK residents can register a business in the UK, provided they have a UK-registered office address for a limited company, or meet HMRC’s requirements for registering as a sole trader.

What happens if I register my business late? Late sole trader registration can lead to HMRC penalties, calculated based on how late the registration is and any tax owed; late Corporation Tax registration can similarly result in penalties from HMRC.

Do I need a business bank account to register? No — it isn’t required to register, but it’s strongly recommended for sole traders and legally required for limited companies to keep business finances separate from personal ones.

Can I change from sole trader to limited company later? Yes — many businesses start as sole traders and incorporate once profits or plans justify the extra administration, without disrupting existing client relationships.

What’s the difference between registering a business name and a trademark? Registering with Companies House or HMRC confirms your legal trading status, but it doesn’t protect your business name from being used elsewhere — a trademark, registered separately, is what actually protects the name itself.

Sources & References

• GOV.UK — set up as a sole trader
• GOV.UK — register your company (Companies House)
• GOV.UK — register for Corporation Tax
• GOV.UK — VAT registration threshold and rules

About the Author Written and reviewed by the Epiclectic Editorial Team. Epiclectic is an independent UK publication owned by Eternity Accountants Limited, publishing practical, fact-checked guides across accounting, business, home & living, gardening, travel, sustainability and wellness. Editorial standards: original research, fact-checking against official sources, and regular review. Last reviewed: August 2026 Sources: GOV.UK, Companies House, HMRC

Conclusion

Registering a business is one of the few genuinely mechanical steps in starting up — there’s a right process, a clear deadline, and very little room for creative interpretation. The businesses that avoid trouble later are simply the ones that register on time, keep their reference numbers organised, and don’t overcomplicate the structure decision before they need to.

If you’ve already registered and want to understand what comes next, our guide to setting up your HMRC business tax account walks through managing your taxes once you’re trading, and our business ideas guide is a good starting point if you’re still deciding what to register.

For anyone weighing up sole trader versus limited company for a growing business, or unsure which registration route fits their plans, Eternity Accountants can talk through the options directly — though for most people starting out, the registration process itself is straightforward enough to complete alone.