Choosing a business structure
Register your business with companies house
Get a Unique Taxpayer Reference
Choose an accounting system
Open a bank account
Get insurance cover
Obtain license and permits
Create a brand identity
Market your business
File your taxes
Starting a business in the UK can be a daunting task. But with the right advice and information, it can be a very rewarding experience. This article will provide you with all the information you need to set up your business in the UK. We will cover everything from choosing a business structure to registering with HM Revenue and Customs (HMRC). So whether you're just starting out or you're ready to take the plunge, read on for all the details!
1. Choose a Business Structure
Among the various business structures available in the UK, the most popular ones are sole trader, limited company, and partnership. Each option has its own set of advantages and disadvantages that need to be considered before selecting one. It is important to understand the legal requirements of each structure and the tax implications that come with it. The structure options are:
This is the simplest and most common type of business set up in the UK. As a sole trader, you will be the only owner and decision-maker. You will be responsible for all profits, losses, and liabilities associated with your business. It is important to note that personal assets can be used as security against business debts.
Most businesses set up in the UK are registered as limited companies. This means that the company's assets are separate from its owners (shareholders). Limited companies have their own legal identity, which allows them to enter into contracts and own property in their own name. The shareholders then benefit from limited liability protection - meaning that they are not personally liable for any losses or debts incurred by the company.
A partnership is a form of business set up by two or more people who share management responsibilities and profits/losses on an agreed-upon basis. All partners must register with HMRC for self-assessment tax and set up a partnership bank account, from which all expenses and income must be paid or received. Partnerships must also establish their rights and duties towards one another in a legally binding agreement (known as a ‘partnership deed’).
It's important to consider carefully what type of structure best suits your circumstances when setting up your business in the UK. Each option has its own benefits and drawbacks, so it is important that you speak to an accountant or solicitor before making any final decisions. Additionally, you will need to register with HMRC for self-assessment tax and set up a business bank account prior to trading - both crucial steps in successfully launching your new venture!
2. Register Your Business with Companies House
Whether you set up a limited company or any other type of business structure, you are required by law to register your business with Companies House.
This registration process must be completed within three months of setting up your business, or you may face penalties from HMRC.
Companies House is an executive agency of the Department for Business, Energy & Industrial Strategy (BEIS), and its main role is to register companies and protect the public's interests.
The process of registering a business with Companies House can begin either before or after the set-up of your business. It usually takes around 24 hours to set up a company once the registration form has been submitted and the correct documents have been provided.
Before registering, you will need to decide on a company name, an address where records will be kept, and details about any directors or shareholders involved in the company.
You may also need to provide details about any company secretary or corporate directors that will be appointed to manage the company.
Additionally, it is important to ensure that your chosen company name does not infringe on any existing trademarks or intellectual property rights.
Once all required information has been submitted and accepted by Companies House, they will issue you with a Certificate of Incorporation which serves as proof that your new company exists and can conduct business within the UK.
Additionally, you must set up a Corporation Tax Account with HMRC so that any profits made by the newly set-up business are taxed correctly. Consider setting up a Company bank account separate from your personal finances, which can help keep track of financial transactions related to your business activities.
It is important to remember that certain regulations are associated with running a limited liability company in accordance with UK law. As such, it is important for all new companies set up in the UK to ensure that they comply with all applicable legislation, including filing annual accounts with both Companies House and HMRC each year - failure to do so may lead to hefty fines!
3. Get a Unique Taxpayer Reference (UTR)
Register for your unique taxpayer reference
Once your company has been registered with Companies House, you will need to get a Unique Taxpayer Reference (UTR) from HMRC for taxation purposes. You can apply for this online at www.gov.uk/apply-unique-taxpayer-reference or call HMRC on 0845 900 0444 for assistance in obtaining your UTR number.
A Unique Taxpayer Reference (UTR) is a 10-digit reference code that is issued to all businesses set up in the UK and is required for taxation purposes. It is used to identify any company or individual who has set up a business and needs to register for, and pay, Corporation Tax.
The UTR can also be used when filing Self Assessment tax returns, as this number will enable HMRC to understand exactly which business entity you are associated with.
When registering with Companies House, your UTR will be sent to you along with your Certificate of Incorporation. If you have set up a limited company, then the UTR will start with the letter ‘C’ followed by nine digits. Alternatively, if you set up an LLP, your UTR will start with 2 letters followed by eight digits.
It is important to keep your UTR secure and not share it publicly or with any third parties, as it could potentially be used for fraudulent activity if accessed by unauthorised persons.
Additionally, HMRC may contact you regarding changes in the information they hold about your business. Hence, it is important to provide them with your UTR number whenever possible so that they can accurately update their records.
HMRC use the information provided in conjunction with your Unique Taxpayer Reference when calculating any taxes due from a business set up in the UK.
This includes calculating how much Corporation Tax must be paid on any profits made and also whether VAT needs to be added to any services or goods sold by the company.
The amount of tax payable will depend on factors such as annual turnover, profit margins and any expenses incurred during the course of running the business.
In addition to being able to file Self Assessment tax returns using one’s own UTR number, companies set up in the UK can also use their Company’s Unique Taxpayer Reference when submitting annual accounts or filing confirmation statements online through the Companies House WebFiling service.
This service allows companies set up in the UK to easily submit their paperwork while staying compliant with UK law - making it easier than ever before for businesses set up in the UK in 2023 to remain on top of their taxes!
4. Choose an Accounting System
View 9 of the best accounting softwares for UK businesses
Setting up an accounting system is crucial for any business. It is especially important when starting up in the UK so that there is an audit trail of all financial transactions made while running the business operations. There are many accounting packages available on the market today, and it’s important to select one that meets your specific needs and requirements to ensure that all finances are properly tracked and monitored throughout each financial year.
Choosing an appropriate and reliable accounting system is key for businesses set up in the UK in 2023. This is because keeping accurate records of all financial transactions, such as invoices, purchases, payments, payroll and taxes, will help you remain compliant with UK laws and regulations and provide a detailed audit trail of all activities within your business.
When selecting an accounting system, it’s important to take into account factors such as the type of business set up in the UK (e.g. sole trader or limited company), size of the business (number of employees) and the level of complexity required when monitoring finances (such as multi-currency capabilities).
More advanced accounting packages are also available that are tailored towards larger businesses set up in the UK with multiple locations. It is best to shop around to find an accounting package that meets your specific requirements - many providers offer free trial periods so you can research and test out different systems before making a purchase decision.
When setting up an accounting system for a business set up in the UK in 2023 it is important to set up a chart of accounts. This is where all income and expenses related to your business will be recorded, including expenses such as materials purchased for services or goods sold by the company, wages paid to staff members or other administrative costs associated with running your business.
Using this chart of accounts allows you to easily create financial statements that contain comprehensive information about any financial activity related to your company’s operations which can then be used for taxation purposes.
Additionally, having exact records of any monetary transactions made during your company’s operations will make it easier for auditors or tax inspectors should they require any information regarding your finances during HMRC audits or investigations.
Another factor to consider when selecting an accounting system is whether it includes automated features such as auto-reconciliation capabilities, which allow payments made directly from bank accounts associated with your business operations to be automatically reconciled against invoices raised, thereby saving time otherwise spent manually matching payments against invoices.
Other helpful features include automated tax returns filing capabilities which reduce the amount of paperwork needed each year when submitting documents for Corporation Tax assessment – some systems even allow companies set up in the UK 2023 to submit their tax returns using their UTR directly through HMRC’s online portal!
Ultimately finding an appropriate accounting system that meets your needs can be difficult, however, ensuring that accurate financial records are kept throughout each financial year is essential in order to remain compliant with UK law while also providing valuable insights into how effective any strategies implemented by management teams have been during their time running a business set up in the UK 2023
5. Open a Bank Account
Once you have set up your company structure and obtained your UTR, it’s time to open a bank account specifically for your business activities. It will also be used during tax returns as evidence of income earned during any given period.
To set up a business bank account in the UK, you typically need two directors from the same organisation who can sign documents electronically or physically by visiting their local branches.
Once you have set up your company structure and obtained your UTR, it’s time to open a business bank account in the UK. In order to set up a business bank account in the UK, a minimum of two directors from the same organization are required who can both sign documents electronically or physically by visiting their local branches respectively.
The process for opening a business bank account will vary depending on the type of business set up in the UK. For example, if set up as a limited company, then an official Certificate of Incorporation is typically required. If setting up as a sole trader, then proof of identity (e.g. passport) may be needed alongside other associated documents.
Additionally, many banks offer specialist services tailored towards businesses set up in the UK in 2023, such as multi-currency accounts, which enable companies to manage payments made and received from suppliers in foreign currencies and offer payment solutions for international customers without additional fees or charges.
When setting up any type of business bank account, it's important to take into account factors like how you intend to use it (e.g. day-to-day transactions vs longer-term savings), any associated fees such as monthly or annual costs, the interest rate paid out on deposited money, overdraft availability and whether there are any limits imposed when withdrawing or transferring money between accounts (e.g. maximum transfer amount).
Additionally, low-cost credit cards or loans can also be set up at this stage which staff members can use for professional purposes such as travel expenses or buying office supplies - just make sure to set clear rules regarding how these resources can be used!
For businesses setting up in the UK conducting activities online, such as e-commerce stores, having an appropriate internet merchant facility is essential in order to securely accept payments made by customers using debit/credit cards or alternative methods like PayPal or Apple Pay etc.
Businesses set up in the UK also need to ensure that they adhere strictly to anti-money laundering legislation when opening any type of corporate bank account – this includes conducting appropriate checks on new customers/clients prior to establishing relationships with them, verifying their identities, monitoring transactions conducted over long periods of time; keeping detailed records; filing Suspicious Activity Reports with authorities should any discrepancies arise, and always acting within compliance regulations set out by HMRC.
Overall, selecting an appropriate business bank account for your company set up in the UK is essential for managing finances effectively while staying compliant with legal requirements – just make sure that comparative research is done beforehand so that you select one that best meets your specific needs!
6. Get Insurance Cover
It is highly recommended that you take out insurance cover for both yourself and your business activities to protect yourself from any potential liabilities arising should anything go wrong during the course of your new venture.
Different types of insurance policies exist depending on what kind of activity you intend to do, such as public liability insurance, professional indemnity insurance, product liability insurance, employers’ liability insurance etc.
Insuring yourself and your business activities is essential to setting up a business in the UK in 2023, as it helps protect you from any potential liabilities arising should anything go wrong.
Depending on the nature of the activity, there are multiple types of insurance policies available such as public liability insurance, professional indemnity insurance, product liability insurance and
7. Obtain Licences & Permits
Certain licences may need to be acquired before commencing trading activities, depending on the type of service or product you offer. Examples include food hygiene certificates, alcohol licences etc. It is worth researching what specific permits might be required ahead of time so as to avoid any problems further down the line when trying to start trading officially .
Obtaining Licences & Permits is an essential part of setting up a business in the UK. It can involve different types of certificates, licences and permits depending on the products or services you plan to offer. For example, if you set up a food business, then a Food Hygiene Certificate must be obtained from the local Environmental Health
8. Create a Brand Identity
A key factor that should always be considered when starting up a new venture is creating an impactful brand identity where customers will instantly recognize who you are and what sets them apart from competitors in the same field.
This includes everything from logo design through website set up to choice fonts used across all branded materials such as stationery items, promotional flyers, etc. Depending on budget constraints, professional help may be sought either internally or externally.
9. Market Your Business
As part of getting customers interested in buying goods/services provided by newly set–up businesses marketing efforts become essential whether this involves advertising online utilizing social media channels, attending trade shows related to industry shows etc.
Alternatively, more traditional methods such as direct mail campaigns involving print leaflets could also prove effective depending upon the target audience being targeted at a particular time frame set out by individual companies whilst taking into consideration any existing competition present within the same marketplace.
10. File Your Tax Returns
Finally, once operations have been formally established, filing tax returns becomes a critical aspect for businesses running successfully within the UK to ensure compliance with regulations set forth by HMRC, including paying taxes due a timely fashion adhere legal requirements set out regarding PAYE ( Pay As You Earn ) deductions applicable cases if employee payrolls exist within organisations concerned too.
Filing your tax returns is an essential part of setting up a business in the UK, and a necessary step to ensure compliance with regulations set forth by HM Revenue & Customs (HMRC). This includes paying taxes due at a timely fashion within the legal requirements set out regarding PAYE (Pay As You Earn) deductions
Starting a business in the UK can be a daunting task, but with careful planning and execution, it can be a successful venture. By ensuring you have the correct insurance policies in place, obtaining the necessary licenses and permits, creating a brand identity that customers will recognise, marketing of your business effectively, you set yourself up for success.