How to start a business in the UK
Everything you actually have to do, in the order you have to do it — written for tradespeople and small local businesses, not for tech startups. No jargon, no upsell.
The short version
Register with HMRC or Companies House, get insured, open a business account, work out your prices, and make sure you look like a real business before you start knocking on doors. The admin is the easy bit — most people lose money on pricing and on looking amateur, not on paperwork.
Decide how you’ll be set up
Sole trader or limited company. This is the first real decision and it affects your tax, your paperwork and your risk.
Sole trader
You and the business are the same legal thing. Register with HMRC for Self Assessment — it takes minutes and costs nothing. Simplest to run, and usually right when you’re starting out. The catch is that you’re personally liable for debts, and if you already run another business as a sole trader, both turnovers are added together for the £90,000 VAT threshold.
Limited company
A separate legal entity. Costs £50 to incorporate at Companies House and brings annual accounts and a confirmation statement with it. Gives you limited liability, can be more tax efficient once profits are decent, and keeps your VAT threshold separate from anything else you run.
Worth twenty minutes with an accountant. Most will talk it through for free because they want your annual accounts. Ask them specifically about VAT if you already have another income stream — that catches a lot of people out.
Get the boring bits in place
None of this is difficult. All of it will stop you trading if you skip it.
Insurance
Public liability is the baseline for most trades, and plenty of customers will ask to see it. Employers’ liability is a legal requirement the moment you take anyone on. Add tools and van cover separately.
Business bank account
Free with Starling, Tide or Monzo. A limited company legally needs one. Sole traders don’t, but keeping business money separate makes your tax return far less painful.
Tax, from day one
Nothing is deducted for you. Move 25–30% of every payment into a separate pot the day it lands. The first Self Assessment bill, with payments on account, is where most new businesses get caught short.
Trade accreditations
Gas Safe, NICEIC, CSCS, DBS — whatever your trade expects. These are trust signals as much as compliance, so put them on your van and your website.
Records
Keep every receipt and invoice. A shoebox works, a free app works better. You need six years of records, and Making Tax Digital is expanding.
Contracts & terms
Even a one-page written quote listing what’s included, what isn’t and when you get paid will save you an argument. Put your payment terms in writing before you start.
Choose a name you can actually keep
People pick a name, print the van, then find out someone else owns it. Do these four checks first — they take about twenty minutes.
Companies House register
Search the exact name and near variants. This tells you whether you can incorporate under it.
UK IPO trade marks
Search the trade mark database, particularly classes 35 and 42 for service businesses. A registered mark beats a company name, so this matters more than people think.
Domain and social handles
Buy the .co.uk and .com together if you can, and grab the matching Instagram and Facebook names the same day.
Say it out loud
“Hi, it’s Dave from ___.” If you have to spell it twice on the phone, it’s the wrong name.
Work out your prices properly
This is where new businesses lose the most money, and it has nothing to do with paperwork.
Don’t price off your old wage
If you earned £18 an hour employed, charging £20 self-employed will leave you worse off. You’re now paying for your own holiday, sick days, pension, tools, insurance, fuel, accountancy and every unpaid hour spent quoting. As a rough guide, your charge-out rate needs to be roughly double your old hourly wage just to stand still.
Count the hours you can’t bill
Quoting, driving, buying materials, chasing invoices and doing your books are all unpaid. Most one-person trades bill 20–25 hours in a 40 hour week. Work out your target income, divide by realistic billable hours, and that’s your rate — not what the bloke down the road charges.
Being the cheapest is not a strategy
There is always someone willing to go lower, and the customers you win on price are the ones who complain the most and pay the slowest. Compete on turning up when you said you would, quoting in writing and answering the phone. That is genuinely rarer than being cheap.
Look like a real business before you need to
You are asking strangers to let you into their home and hand over money. Everything they can see decides whether they trust you.
A name on the van
The single highest-return thing a trade can do. It advertises everywhere you park and it makes you look established from day one.
Something to send people to
Even one good page. People will search your name after you quote — if nothing comes up, that’s a mark against you.
A Google Business Profile
Free, and it’s how you appear in “near me” searches and on Maps. Ask every happy customer for a review.
Branded workwear
A polo with your name on it costs very little and completely changes how a customer reads you at the door.
Written quotes
A tidy quote with your logo on it wins work against a number scribbled on a scrap of paper. Every time.
Consistency
Same name, same colours, same logo on the van, the shirt, the quote and the website. Mismatched bits look temporary.
Where your first customers come from
Almost never from advertising. Here’s the realistic order.
- People who already know you. Tell everyone you’ve started. Most first jobs come from someone who already trusts you.
- Other trades. A plumber who knows a good sparky refers constantly. Introduce yourself to the trades that work alongside yours.
- Local Facebook groups. Be useful and answer questions rather than posting adverts. Slow, but the trust is real.
- Google Business Profile and reviews. Free, and it compounds. Ask for a review every single time.
- Your van. A lettered vehicle works every hour it’s parked, and you pay for it once.
- Doing what you said you’d do. Unglamorous, and still the best marketing there is.
Starting a business: the questions people ask most.
Do I need a business plan to start a trade business in the UK?
Legally, no. You only need a business plan if you are applying for a loan, a Start Up Loan or a grant, where the lender will require one. In practice a short plan is still worth writing because it forces you to work out your pricing, your costs and how many jobs a week you actually need. Most people who skip it end up underpricing.
How much does it cost to start a small business in the UK?
For a service or trade business run from home, the realistic minimum is a few hundred pounds: around £50 to register a limited company (nothing if you register as a sole trader), £150 to £300 a year for insurance, £30 for a domain, and whatever tools or equipment your trade needs. The bigger costs are usually a vehicle, tools and materials rather than admin.
Should I be a sole trader or a limited company?
Sole trader is simpler and cheaper to run, and is usually right when you are starting out and profits are modest. A limited company gives you limited liability, can be more tax efficient at higher profits, and keeps that business separate for VAT if you already run another business as a sole trader. Ask an accountant before you decide — it is a 20 minute conversation that can save you thousands.
What insurance do I need to start a business?
Most trades need public liability insurance as a minimum, and many customers or contracts will insist on it. If you employ anyone, employers' liability is a legal requirement. If you give advice or design as part of your service, professional indemnity is worth having. Tools and van cover are separate again.
How do I check a business name is available?
Search the Companies House register for the exact name and close variants, check the UK IPO trade mark database, then check the domain and the social handles. A name being free on Companies House does not mean nobody holds a trade mark on it — check both before you spend money on signage.
How long does it take to set up a business?
Registering as a sole trader with HMRC takes minutes. A limited company can be incorporated in 24 hours. What actually takes time is everything around it: insurance, a bank account, pricing, and looking credible enough that people trust you with their money. Most people underestimate the last one.
Want the whole lot done for you?
From Scratch does the plan, the logo, the website and the mockups as one fixed-price package — from £299. One person, two to three weeks, and you own everything at the end.
See the packages →Ready to get your business off the ground?
Book a free 30-minute call. We’ll talk through your idea and I’ll tell you honestly whether I can help.
- No hard sell, and no obligation
- Honest advice, even if that’s “not yet”
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