Let’s Get Your Business Registered the Right Way...
Registering your business with HMRC is a crucial first step, but it’s one many new business owners get wrong.
From missing deadlines to choosing the wrong structure, simple errors can delay your registration, lead to penalties, or cause long-term tax headaches.
This guide covers the essential steps to register your business correctly in the UK, whether you're a sole trader, limited company, or part of a partnership.
With tools like Pie tax, the UK’s first personal tax app, you can streamline the process and get real-time support as you set up. Let’s break it down.
Introduction
Starting a business in the UK means getting properly registered so you can operate legally and handle your taxes correctly. The process varies depending on whether you're going solo, forming a partnership, or creating a limited company.
Understanding your registration options early can save you major tax headaches. It might also potentially reduce what you owe to HMRC in the long run.
What Does Registering a Business Actually Mean?
When you register your business, you’re essentially putting your hand up to HMRC and saying, “Hello, I’m trading now!” This creates your official tax relationship with the government.
You’ll get unique tax reference numbers that you’ll use for all your future tax affairs. Think of these as your business’s tax reference.
The registration requirements change based on your business structure, sole trader, limited company, or partnership. Each business entity, such as an LLC, corporation, or partnership, has its own registration process and legal obligations.
Registering as a distinct legal entity is important for proper tax and legal treatment. Each comes with different paperwork and deadlines. If you operate under your legal name, you may not need to register a separate business name, but using a different name may require additional registration steps.
Missing registration deadlines can result in penalties. It’s worth getting this sorted promptly when you start trading.
How to Register as a Sole Trader
Becoming a sole trader is the simplest business structure to set up. This is also known as a sole proprietorship.
You’ll need to register for Self Assessment with HMRC by completing the CWF1 form online. Sole proprietors may need to provide a mailing address if it differs from their business address.
The deadline is 5 October after the end of the tax year you started trading in. For example, if you started trading in February 2025, you’d need to register by 5 October 2025.
Once registered, you’ll receive a Unique Taxpayer Reference (UTR) which you’ll use for all your tax affairs. Keep this safe, it’s important! You may need to provide legal documents to verify your identity during registration.
If your turnover reaches £90,000, you’ll also need to register for VAT. You can choose to register voluntarily before that if it benefits your business. If you operate under a name different from your legal name, you may need to register a fictitious business name (also known as a fictitious name or DBA) with your local authority.
Setting Up a Limited Company
Limited companies offer more protection but require more paperwork. First, you’ll need to register with Companies House. A limited company is a business entity that must be legally formed by filing the appropriate legal documents with Companies House.
You’ll need a unique company name that isn’t already taken. You’ll also need a registered office address and at least one director (which can be you). You must provide a business address and, if different, a mailing address for official correspondence.
Within three months of starting business activities, you must register for Corporation Tax with HMRC. You will need to provide your company’s id number and may need to appoint a registered agent to receive legal documents on behalf of the company
You’ll pay Corporation Tax on company profits. If you take money out as salary, you’ll need to set up PAYE. This is necessary if you have employees and need to pay employees and file business tax returns.
If you take dividends, these are taxed differently. Don’t forget to register for VAT if your taxable turnover exceeds £90,000 in any 12-month period. In the US, some companies may choose to register as an S corp for specific tax benefits.
Registering a Business Partnership
In a partnership, each partner needs to register individually for Self Assessment. This applies to general partnerships, limited liability partnerships, and limited partnerships. You’ll also need to register the partnership itself. A partnership is a business entity that must be legally formed by filing the appropriate legal documents.
One of you becomes the ‘nominated partner’ who handles the partnership’s tax returns. You’ll receive a Partnership UTR to use on tax forms.
Each partner pays income tax and National Insurance on their share of the partnership profits. This is done through their personal Self Assessment.
The partnership will need to file a Partnership Tax Return (SA800) every year. This shows how profits are divided between partners.
Consider creating a formal Partnership Agreement that clearly sets out how tax responsibilities are shared. Forming a limited liability partnership or limited partnership involves additional legal documents and registration steps. This can save arguments later!
VAT Registration: When and How
You must register for VAT when your taxable turnover exceeds £90,000 in any 12-month period. This is the law, not optional.
Many businesses choose to register voluntarily before reaching this threshold. It can make you look more established and allows you to reclaim VAT on purchases. VAT registration requirements may also vary depending on your business location and whether you operate in more than one city.
Once registered, you’ll need to charge VAT on your goods or services. You’ll also file quarterly VAT returns.
Most businesses now need to do this using Making Tax Digital software. There are different VAT schemes available that might suit your business.
The Flat Rate Scheme can be simpler for small businesses. Remember that VAT registration affects your pricing, you’ll need to decide whether to absorb the VAT or pass it on to customers.
Other Registration Requirements to Consider
If you’re using commercial premises, you’ll need to register for business rates with your local council. Depending on your business location, you may also need to obtain permits from your local city or county authorities.
Handling customer data? You’ll likely need to register with the Information Commissioner’s Office (ICO). Some registrations may require you to provide additional information beyond the standard forms.
Taking on staff means registering as an employer with HMRC. This covers PAYE and National Insurance contributions.
Certain industries require specific licences or registrations. For example, food businesses need to register with their local authority. New businesses should also consider applying for trademark protection to secure their brand.
Don’t forget about insurance! Some types, like employer’s liability insurance if you have staff, are legally required. Insurance requirements may vary depending on your business location and the permits required by your city or county.
I learned this the hard way when starting my first consultancy. I’d registered for taxes but forgotten about ICO registration, leading to a frantic last-minute application when a client asked for proof.
Compliance and Reporting
Once your business registration is complete, staying compliant with ongoing reporting requirements is essential.
This Beneficial Ownership Information (BOI) report must be submitted by March 21, 2025, for most reporting companies, so it’s important to mark this deadline in your calendar
Most businesses, including small businesses and general partnerships, need to register with federal agencies and obtain an identification number such as an UTR. Ensuring you meet all registration requirements for your business structure and location helps you avoid penalties and keeps your business in good standing.
Staying on top of compliance and reporting obligations means you can focus on growing your business, confident that you’re operating legally and efficiently. Make sure to keep your records up to date and report any changes in your business structure or beneficial owners promptly to the relevant authorities.
Final Thoughts
Registering your business properly sets you up for tax success from day one. The structure you choose affects how much tax you pay, your personal liability, and your admin workload.
The registration process might seem daunting at first, but breaking it down into steps makes it manageable. Just make sure you keep track of all those important deadlines.
If your situation is complex or you're unsure which structure is best for you, it's worth getting professional advice before you register.
