How to Start a Business in the UK: A Practical Guide
A straightforward checklist for turning an idea or trade into a working UK business. Rules depend on your circumstances, so use the linked GOV.UK guidance and take professional advice where needed.
Starting as a student or college leaver
You can start planning a business while you are still studying. Our free calculators, templates and Sector Finder are open to everyone with no account needed, so you can test ideas and price your work before you commit. A 123 Tenders account is for people aged 18 and over, so you will need to be 18 to save contracts, set up alerts or keep records in your account.
How to go self employed
Most people start as a sole trader. You usually need to tell HMRC you are self employed by registering for Self Assessment, then keep records of your income and expenses and file a tax return each year. GOV.UK explains when you need to register and what to do next.
Working for yourself on GOV.UK Set up as a sole traderChoose a business structure
A sole trader runs the business personally and is responsible for its debts. A limited company is legally separate from its owners and has different reporting and tax duties. Compare both before registering.
Set up a business on GOV.UKRegister with HMRC or Companies House
Sole traders may need to register for Self Assessment with HMRC. Limited companies register with Companies House and have ongoing filing duties. Check the official steps and deadlines for the structure you choose.
Register as a sole trader Set up a limited companyCheck insurance and permits
Your work may require insurance, licences, registrations or permits. Employers' liability insurance is normally required when you employ staff. Trade-specific rules can also apply, so check GOV.UK and the relevant regulator before starting work.
Find licences and permitsPrice your work
Build labour, materials, overheads, non-billable time and a sustainable margin into your price. Test the numbers before committing them to a customer or contract.
Prepare quotes and invoices
Set out the work, price, VAT position, payment terms and validity period clearly. Keep a consistent record of what the customer accepted and what you later invoiced.
Find your first customers and public sector work
Start with a clear service, area and customer problem. Build evidence from completed work, ask genuine customers for honest feedback and look for public sector opportunities that match your capacity.
Hire your first worker
Before hiring, check employment status, pay, right to work, insurance and workplace duties. Use official guidance and keep a genuine vacancy clear about the role and terms.
Last checked: 29 September 2026. This guide is general information, not legal, tax or financial advice.