Starting a business in the UK is exciting, but those first few weeks can feel overwhelming. There are forms to fill, registrations to complete, and decisions to make that will shape your business for years to come.
The good news? Most of these tasks are straightforward when you know what to do and in what order. Here are the 7 essential steps to complete in your first 30 days.
1. Choose the Right Business Structure
The first critical decision involves selecting an appropriate legal structure. Your three primary options are:
Sole Trader
- Simplest setup option
- You and your business are a single legal entity
- Personal responsibility for all business debts
- Straightforward Self Assessment registration with HMRC
Limited Company
- Separate legal entity from the owner
- Better asset protection for personal property
- Potentially more tax-efficient
- Requires Companies House registration
- Involves additional reporting obligations
Partnership
- Similar to sole trading but with multiple people
- Shared responsibilities and profits
There is no one-size-fits-all answer here. Consider your earning expectations and growth plans when deciding. Professional advice at this stage can prevent complications if restructuring becomes necessary later.
2. Register with HMRC
Registration requirements differ by business structure.
For Sole Traders:
- Register for Self Assessment online via GOV.UK
- Requires National Insurance number
- Deadline is October 5 following the tax year you start trading
- HMRC sends a Unique Taxpayer Reference (UTR) by post
For Limited Companies:
- Companies House automatically notifies HMRC upon incorporation
- Corporation Tax UTR arrives within approximately three weeks
- Must register for Corporation Tax within three months of commencing trade
3. Open a Business Bank Account
While sole traders are not legally required to maintain separate accounts, we strongly recommend doing so because it:
- Simplifies bookkeeping significantly
- Maintains professional financial separation
- Demonstrates transparency to tax authorities
- Prevents complications during HMRC inquiries
For limited companies, a business bank account is mandatory. Personal accounts cannot be used for company finances.
Required documentation typically includes proof of identity, proof of address, and business details. Digital banks often process applications faster than traditional institutions.
4. Set Up a Proper Record-Keeping System
HMRC requires comprehensive record retention. Required records include:
- Invoices sent and received
- Receipts for business purchases
- Bank statements
- Mileage logs for work-related travel
- Stock and materials records
Retention periods:
- Self-employed: five years after January 31 deadline for the relevant tax year
- Limited companies: six years from accounting period end
Making Tax Digital
From April 2026, sole traders and landlords earning over £50,000 must keep digital records and submit quarterly updates to HMRC. We recommend choosing MTD-compatible accounting software like Xero, QuickBooks, or FreeAgent to simplify compliance.
5. Check Whether You Need to Register for VAT
You must register for VAT if your taxable turnover exceeds £90,000 during any 12-month rolling period. You must register within 30 days of exceeding the threshold. The deregistration threshold is £88,000.
Voluntary registration:
- Optional if below the threshold
- Allows VAT reclamation on business purchases
- Requires charging VAT to customers, potentially affecting pricing
Registration occurs online through GOV.UK. Early consideration of VAT implications helps with pricing strategy and financial planning as the business grows.
6. Register for PAYE If You're Hiring
PAYE registration becomes necessary when employing anyone, including company directors taking salaries.
Key requirements:
- Register before the first payday
- HMRC advises registering at least two weeks in advance
- Can register up to two months before first payday
Employer responsibilities:
- Deducting Income Tax and National Insurance from wages
- Paying employer's National Insurance contributions
- Submitting Full Payment Submissions (FPS) with each payroll run
- Providing payslips to employees
We recommend using payroll software or outsourcing to an accountant to avoid errors and penalties.
7. Understand Your National Insurance Obligations
For Sole Traders:
- Automatically covered through Self Assessment registration
- Class 2 contributions no longer mandatory (as of April 2024)
- Optional voluntary contributions (£3.50 weekly for 2025/26) protect State Pension eligibility
- Class 4 contributions: 6% on profits between £12,570 and £50,270; 2% above that threshold
- Collected through Self Assessment tax return
For Limited Company Directors:
- If taking salary through PAYE, standard employee National Insurance applies
- Many directors optimise by drawing salary below the National Insurance threshold and taking additional income as dividends
- Tax efficiency depends on individual circumstances
Getting Started
None of the steps above are particularly difficult on their own, but taken together, they can feel like a lot. Our key recommendations:
- Do not delay registrations, as processing takes time
- Open bank accounts early
- Seek professional guidance when uncertain
At Ollen Services, we help people who are starting a business in the UK navigate the setup process. Whether you need help choosing the right structure, setting up your bookkeeping, or understanding your tax obligations, we are here to help.
Book a free 30-minute consultation to discuss your new business. Contact us at hello@ollenservices.co.uk or call 07513 491 259.