Choose your business structure

Decide between sole trader, partnership, or limited company - this affects your taxes and legal responsibilities.

Understanding business structures

Your choice of structure affects everything from how you pay tax to your personal liability. Here's what you need to know.

Sole trader: Simplest to set up. You keep all profits but are personally liable for debts.
Partnership: Share responsibilities and profits. Partners share liability for business debts.
Limited company: Separate legal entity. Personal liability limited to investment, but more admin.
LLP: Partnership with limited liability. Must file accounts at Companies House.

Business structure affects tax liability, personal liability, and required paperwork. Professional advice is recommended when choosing the right structure.

Register with HMRC

Do this before you start trading - set up your tax obligations from day one.

Getting started with taxes

As a new business owner, registering with HMRC is one of your first priorities. The steps depend on your business structure.

Self Assessment (sole traders/partnerships): Register by 5 October after your first tax year
Corporation Tax (limited companies): Register within 3 months of starting to trade
VAT registration threshold: £90,000 turnover in 12 months (mandatory)
PAYE (employers): Register before first payday
CIS (construction): Register before first payment to subcontractors

gov.uk

Write a business plan (opens in a new tab)

Map out your business idea - essential for securing funding and staying focused.

What makes a good business plan

A business plan helps you think through your idea and is often required when applying for funding or loans.

1. Executive Summary: Maximum 1,000 words (2 pages). Written last but appears first. Summarises business concept, opportunity, and funding needs.
2. Personal Summary: Your background, skills, qualifications, experience. Why you're the right person.
3. Business Concept: What your business does, problem solved, target customers, business structure.
4. Products and Services: Features, benefits, unique selling points, pricing strategy, intellectual property.
5. Market Analysis: Market size, growth trends, customer demographics, buying behaviours.
6. Competitive Analysis: Direct and indirect competitors, strengths, weaknesses, your competitive advantage.

Understand your insurance needs

Protect your business from risks before you open.

Insurance essentials for new businesses

The right insurance protects you, your employees, and your customers. Some types are legally required.

UK businesses need different types of insurance depending on their activities. Some are legally required, others are contractually required, and some are optional but prudent. Understanding the differences helps ensure adequate protection.

Employers' Liability: LEGALLY REQUIRED if you employ anyone. Minimum £5m cover. Protects against employee injury/illness claims.
Motor Insurance: LEGALLY REQUIRED for any vehicle used for business. Criminal offence to drive uninsured.
Professional Indemnity: Required for some regulated professions under their profession-specific rules, including many solicitors, financial advisers and architects. Covers negligent advice claims.
Public Liability: NOT legally required but often contractually required by clients. Covers third-party injury/damage claims.
Products Liability: NOT legally required but essential for manufacturers and retailers. Covers claims from defective products.
Business Contents: NOT required but recommended. Covers theft, fire, damage to business assets.
Business Interruption: NOT required but recommended. Covers lost income when you cannot trade.
Cyber Insurance: Increasingly important. Covers data breaches, ransomware, GDPR fines.
Key Person: Optional. Compensates business if critical person dies or is incapacitated.

Choosing the right cover:

Do you employ anyone? Employers' Liability is legally required
Do you use vehicles for work? Business motor insurance is legally required
Are you a regulated professional? Check your regulator's profession-specific Professional Indemnity rules
Do you interact with customers or visit premises? Public Liability is practically essential
Do you sell physical products? Products Liability is strongly recommended

Explore funding options

Grants, loans, and other funding to help your business grow.

Finding the right funding

There are many options for funding your new business, from government-backed loans to grants for specific sectors.

Start Up Loans: £500-£25,000 at 7.5% fixed rate (rose from 6% on 6 April 2026). Includes 12 months free mentoring.
Growth Guarantee Scheme: Government-backed loans up to £2 million for established businesses.
Grants: Not repayable but competitive. Check regional and sector-specific schemes.
British Business Bank: Helps connect smaller businesses with finance providers.

Finance and support for your business (opens in a new tab)

ico.org.uk

Protect your data (opens in a new tab)

GDPR compliance is required from day one if you handle customer data.

Data protection basics

If you collect any customer information, you need to comply with data protection law. Here are the essentials.

The UK GDPR (UK General Data Protection Regulation) and Data Protection Act 2018 govern how organisations process personal data.

Key principles:

Lawfulness, fairness, transparency - process lawfully and openly
Purpose limitation - collect for specified purposes only
Data minimisation - collect only what's necessary
Accuracy - keep data accurate and up to date
Storage limitation - don't keep longer than needed
Integrity and confidentiality - keep data secure
Accountability - demonstrate compliance

The ICO (Information Commissioner's Office) is the UK's data protection regulator.

Start a business

Choose your business structure

Register with HMRC

Write a business plan (opens in a new tab)

Understand your insurance needs

Explore funding options

Protect your data (opens in a new tab)

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