Checklist For Starting A Business UK

setting up a business uk
This is your complete guide to setting up a business in the UK in 2022.

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You have the idea and you know how it’s going to work. You’re ready to get going and put your idea into action. Here’s your checklist for starting a business UK so you can feel confident you’re not missing anything.

Check out our compare section to find everything you need to start and grow your business.

In this guide

What do I need to do to set up a small business?

What you need to in terms of registering and setting up a business depends on the type of business you want to start, where you want work, and whether you will employ staff.

There’s also a number of other things you need to do in order to set up your business properly. Follow this checklist and you’ll be on the right track!

Checklist: Setting up a business

  1. Get your business name

  2. Register your business

  3. Check the rules

  4. Setting up a business bank account

  5. Start your business website

  6. Recruiting staff

  7. Budget for business costs

  8. Business technology – what you’ll need

Get your business name

If you already have a name for your business, great work! If you’re still deciding, or you want to check your name is suitable, here’s a checklist to make sure you can use your business name, according to the UK Government:

  • Your business name must not be offensive or use a ‘sensitive’ word or phrase

  • You cannot use the same name as an existing trade mark

  • You cannot suggest a connection to Government, public agencies or councils unless you get permission

  • For sole traders, your name and business name (if you have one) must be included on official paperwork, such as invoices and letters

Have you secured your business name for your website? Find and compare domain names here, to make sure you get the best one for your new business!

Register your business

Once you have your business name, you’ll then need to register your business. The most common way to do this is either as a sole trader, limited company or partnership.

Sole traders

The easiest way to start a small business is to set up as a sole trader. This means you’re personally responsible for your business’s debts, and you also have accounting responsibilities that need to be met.

If you’re setting up a business and you will be the only person working in it – perhaps as a freelancer – it may make sense to start as a sole trader. If you’re setting up a business as a sole trader, you must tell HMRC that you pay tax through Self Assessment.

You will need to file a tax return every year. Visit the UK Government website to find out more about setting up a business as a sole trader.

Limited companies

If you decide to set up a limited company, the company’s finances are separate from your personal finances. There are, however, more reporting and management responsibilities for you as a company Director.

You can get help from a professional, such as an accountant, if you’re not confident managing these responsibilities yourself, or you can set up the company yourself.


A partnership is the most straight forward way for 2 or more people to start a business. You all share responsibility for your business’s debts, and you’ll also have accounting responsibilities.

Find out more about being in a partnership by visiting the UK Government website.

Check the rules

Depending on what your business does, there are certain rules and laws you will need to comply with. Your business will also need certain insurances in place before you can begin trading.

If your business will sell food, trade in a public place or play music, you may need a licence or permit. Check licences or permits here.

There are also rules you must follow in order to:

Data protection

Your business will most likely come into contact with personal data on customers, staff and suppliers. In order to make sure your business complies with the law, you will need to create a privacy policy and understand the rules around data protection.

Check out our guide to data protection when setting up a business here.

Setting up a business from home

Setting up a business from home is not as simple as just opening your laptop. There are certain rules and responsibilities you need to make sure you comply with.

These include:

  • Permission from your mortgage provider or landlord if you rent your home

  • Planning permission from the council if you are making any changes to your home to accommodate the business

  • A licence from the council if you plan on advertising outside your home, or will be taking a lot of deliveries from the pavement

  • Managing health and safety as you would with any other business

Your home insurance may not cover setting up a business from home, so you will need to check with your home insurance provider to make sure you are covered. You may have to pay business rates on the section of your home that you use for your business.

However the good news if you may qualify for rate relief for small business if your home has a ‘rateable value’ of £12,000 or less.

Check out these guides if you’re setting up a business from home.

Setting up a business bank account

Setting up a business bank account online is an easy process. The hard part is choosing which business bank account you want to open. You open a business bank account for any type of business you set-up.

Compare online business bank accounts here to find the best one for you, or if you want to find the best digital bank account.

Check out this list of the 7 top business bank accounts

Start your business website

Once you’ve purchased your domain name, you’ll want to start designing and setting up your business website. There many different ways you can do this depending on your budget and level of expertise.

If you’re on a tight budget, the best way to start a great looking business website is with a website builder. Whether you’re looking to set up an online store or you just need a website to showcase your work or start a blog, you can compare website builders here to find what works for you.

If you need some guidance on what website builder will be best for your new business, check out this guide.

Recruiting staff

If you plan on using agency workers or freelancers you have some responsibilities, such as their health and safety. Make sure you check the UK Government guidance on this to ensure you comply.

Becoming an employer

There are things you’ll need to do if you employ staff. Your responsibilities will include:

You can simplify the payroll process by using an accounting software which calculates everything for you, and submits information to HMRC digitally.

Compare accounting and payroll software here.

Budget for business costs

A common question we get asked is, how much does it cost to set up a company in the UK? Setting up a business in the UK can be done with minimal cost.

Setting up a business costs

There are a number of registration fees which you may or may not have to pay, depending on the nature and type of business you set up.

Here’s the costs that you’ll need to budget for when setting up a business.

  • Companies house registration fee

  • HMRC filing fee

  • Accountancy fees – if you’re using an accountant to start your business

  • Register your domain name

  • Website hosting

  • Website building tools

  • Business insurance

  • Any licences you may need (discussed earlier)

  • Bookkeeping software – if you’re not using a bookkeeper or accountant

  • Graphic design for your business logo

  • Marketing and advertising expenses

  • CRM software – to create a customer database

  • Job advertising costs

  • Legal fees – for partnership agreements or if there will be more than one Director in a limited company

  • Premises costs

  • Stock – if you’re a retail business

  • Import duty tax – if you’re importing goods from overseas to sell

  • Point of sale systems – your system for taking payments from customers and managing stock

This is not an exhaustive list, but it should give you an idea of the likely costs involved with setting up a business in the UK. The specific amount for certain items (such as insurance) will vary depending on the nature of your business.

Business technology – what you’ll need

For your business to succeed in the digital world, you’ll need to invest in business technology. The good news is these digital tools for business are low cost and can be used to help you with setting up a business.

Digitalsupermarket is a free comparison site helping small business owners find and compare business technology.

Starting a business FAQs

Can you run a business without registering it UK?

You can set up and run a business in the UK as a sole trader or partnership without registering with Companies house, but you will need to register your busines with HMRC for tax.

Can one person be a limited company?

Yes, one person can be a limited company in the UK. You will register as the company director and most likely the company secretary, unless you are outsourcing the responsibility to an accountant or third-party service.

Where can I compare business technology for my small business?

You’ve come to the right place! DigitalSupermarket is the first and only comparison website for business technology. We’re on a mission to help small businesses succeed in the digital world with easy guides and price comparison tools helping you find the best digital tools for your small business.

If you’re looking to start a digital business, more information can be found in our guide to how to start an online business.

Ready to grow your business? Check out this guide to 26 new ways to grow your business online.

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