In the UK, it's a legal requirement for every business to register for tax purposes. This means that even if your company doesn't have any employees, you'll need to let HMRC know that you're self-employed and pay Class 2 National Insurance (equivalent to employee's National Insurance). You can register as self-employed with HMRC online or over the phone. You'll then be asked questions about your income and expenses so they can work out how much tax you need to pay each year. As part of this process, HMRC will also ask if your business operates from a home address and whether property is owned by anyone else who lives there with you - such as family members or tenants on an Assured Shorthold Tenancy agreement. If it does then this person may also have tax obligations relating to their property income or savings interest earned over £10k per year
1. Check the company name
The first step to setting up your company is to check whether a similar name is already in use. You can do this by searching for the company name on Google and checking if any matches pop up. If there are matches, you should press "search for more results." This will display all related companies that have been registered with DBERR (the UK’s filing service).
If the names match exactly or closely enough, then it's likely that another company has been using that name and has priority over yours. The next thing to do would be to contact them directly and ask them what they intend to do with their business – they may not want any competition!
If you get no response from this initial contact, it may be possible for you to register your new business under another slightly different name without infringing on others' trademarks or intellectual property rights.
2. Select a legal form
In the UK, you can incorporate your business as a:
- Sole trader. This is the easiest and most common way. You will be responsible for everything that happens in your company.
- Partnership. This is similar to a sole trader but with more than one person involved. Partners are jointly and severally liable for all debts incurred by the partnership, but they can also share profits between them according to their contributions (e.g., if one partner does 80% of the work and another 20%, then he or she would get 80% of any profits).
- Limited company (Ltd.). A limited company has its liability limited to £1 (or €1 in Ireland) per shareholder for any debts it incurs—so if you have five shareholders each investing £100k into your startup when it starts out, then each shareholder’s risk exposure is capped at £50k rather than £500k if you start out as an unincorporated partnership or unincorporated joint venture instead! It also means that only shareholders are considered responsible for what happens within a business; this prevents employees from being held accountable for their actions at work—which makes sense because otherwise corporations could be sued by anybody who felt wronged by an employee—and gives companies some protection against lawsuits filed by disgruntled customers who might feel like they were treated unfairly while purchasing goods or services from them.* Limited liability partnership (LLP). LLPs offer similar benefits as LLPs except there isn't any limit on how much money partners must contribute toward starting up costs before forming their own business entity.* Limited liability company (LLC). LLCs offer similar benefits as LLCs except there isn't any limit on how much money members must contribute toward starting up costs before forming their own legal structure
3. Get ready to register your company
It's important to choose a name that has not already been registered by another company.
- Company name: This is the official name of your new company and should be distinctive, memorable, relevant and easy to pronounce.
- Address: You will also need to provide an address for your business (which can be any UK address). If you don't have an office yet, you can use a PO Box until you do.
4. Confirm your business address
- Confirm your business address
Using the same address for your business and registered office is recommended. The address must be a place where you can receive mail and visitors, and it must be in the UK. It can also be used as a place where you can meet with employees if they are not based at your main premises or if they live far away from those premises.
5. Consider registering for VAT
VAT (Value-Added Tax) is a tax on the supply of goods and services. It’s charged at 20% on most goods and services, although 5% is charged on some items like food, books and children’s clothes. Certain services are also exempt from VAT such as banking, legal advice and charities. If you need to pay VAT, you should register for it before your company opens its doors to customers by submitting an application form VIES01A to HMRC.
6. Register your company at Companies House
The company's registered address and registered office must be the same. The registered office is where your company will be managed, so you should choose a place that has easy access to public transport and local amenities. This can be anywhere in the UK, but it must be within five miles of the address where your business is physically located. The advantage of having an office outside of London is that you don't have to pay council tax on commercial property (which can add up quickly).
As for what kind of building or address to use? You can pick from any sort—a shop front, private residence, industrial estate... whatever works for you! Just make sure that there are no other companies with similar names nearby as this could lead to confusion when sending correspondence or collecting mail from Companies House.
7. Register with other government agencies and organisations
- Register with other government agencies and organisations
It's important to register with other government agencies and organisations. For example, you'll need to register for VAT if your business is based in the UK and makes sales or supplies that are subject to VAT. You can also register for PAYE (Pay As You Earn), corporation tax, income tax, HMRC and the Business Rates.
If you're registered for VAT in England, Scotland or Wales then you'll be able to claim back the cost of a business rate bill if it relates to premises located within these areas because there will be an additional 3% discount on top of any other discounts which are currently available through council tax/rate relief schemes (see above). It will also reduce your monthly bill by around £100 per month!
8. Tell HM Revenue and Customs (HMRC) that you're self-employed, so that they know you need to pay tax through Self Assessment and pay Class 2 and 4 National Insurance contributions
The next thing to do is tell HMRC that you're self-employed, so that they can know that you need to pay tax through Self Assessment and pay Class 2 and 4 National Insurance contributions.
First of all, register for Self Assessment by filling in this online form . It's easy!
Then, if you're running a company then there are two types of tax returns for your business (profits or losses): Corporation Tax and Income Tax. The first one is paid by the company itself, while the second one is paid by individuals within the company such as directors or shareholders. In order to make sure everything will be done correctly from now on in terms of bookkeeping and accounting, it's best if someone qualified does both these jobs - which means having someone else help out with keeping track of finances.
9. Open a business bank account
Open a business bank account.
Once you have registered as a company, you will need to open a business bank account. If you are in the UK, it is best to open an account with a bank that is used by other businesses in your industry and has a good reputation (e.g., Lloyds Bank, Wamo). You should also look for an online banking system that allows you to easily manage payments and transfers between your company and personal accounts, as well as make deposits through mobile apps or face-to-face at one of their branches.
In this article, we'll guide you through the process of setting up a limited company and all the legal requirements for starting up a business in the UK
- What are the startup costs for a limited company?
- What are the legal requirements for setting up a business in the UK?
- How does taxation work for companies and sole traders in the UK?
- How do I set up an accounting system for my business?
- Do I need to open a separate bank account for my new business, or can I use my personal account instead?
- What name should I choose for my company, and how long will it take to register its name (if required)?