# How to Start a Business in the UK in 2025: A Step-by-Step Guide

> Starting a business in the UK involves navigating registration, tax, legal and practical requirements. Here is what you actually need to do, in order.

*Section: Business — By Marcus Vale (Business & Markets Editor) — Published October 29, 2025 — 1 min read*

Canonical URL: https://dailyjunction.org/business/how-to-start-a-business-uk-2025
Tags: start a business, uk, sole trader, limited company, hmrc, companies house

## Key takeaways

- Most new businesses choose either sole trader or limited company structure — each has distinct advantages
- Registering as a limited company at Companies House costs £50 and takes minutes online
- All businesses must register for tax — sole traders with HMRC, companies both with HMRC and Companies House
- A business bank account is essential for keeping business and personal finances separate

## Choose your structure

Most new businesses in the UK operate as either a sole trader (you and the business are legally the same person — simple, no registration required beyond HMRC notification) or a limited company (a separate legal entity, offering limited liability protection and typically more tax-efficient above a certain profit level).

## Registering

Sole traders: register with HMRC for self-assessment by 5 October of the tax year after you first become self-employed. Limited companies: register with Companies House (the UK registrar) at companieshouse.gov.uk. This costs £50 online, takes minutes, and gives you a company registration number. You will also need to register the company with HMRC for corporation tax.

## Tax obligations

Sole traders pay income tax and National Insurance on business profits via self-assessment. Limited companies pay corporation tax (currently 19-25% depending on profit level), and directors who take a salary also pay income tax and National Insurance. VAT registration is required once taxable turnover exceeds £90,000; many smaller businesses voluntarily register earlier.

## Practical essentials

Open a dedicated business bank account — keeping business and personal finances separate is essential for accounting and tax. Get appropriate insurance. Consider whether you need planning permission or specific licences for your type of business. If you employ people, set up a payroll scheme and comply with auto-enrolment pension obligations from your first day as an employer.

## Frequently asked questions

### Is this article accurate?

We apply a two-source minimum for factual claims and update articles when information changes significantly.

### When was this published?

See the publication date in the byline above. We note significant updates with a revised date.

## Sources

- [Financial Times](https://www.ft.com)
- [Harvard Business Review](https://hbr.org)

---
Daily Junction — https://dailyjunction.org/business/how-to-start-a-business-uk-2025