# Starting a trade business in the UK: a checklist

> A plain-English checklist for starting a trade business in the UK: sole trader or limited company, HMRC and Companies House, insurance, schemes, bank and website.

- Source: https://nerdsharks.com/blog/starting-a-trade-business-uk-checklist
- Publisher: Nerdsharks (Exeter, Devon, UK)
- Updated: 2026-09-19

**Short answer:** Starting a trade business in the UK comes down to a short list: pick a structure (sole trader or limited company), register with HMRC or Companies House, get the insurance you need, join any scheme your trade legally requires, open a separate bank account, and set up a Google Business Profile and a simple website so customers can find and check you.

Published 2026-09-19. 6 min read. Category: Marketing and AI search.

Starting a trade business in the UK is less paperwork than most people fear, but the order matters, and a couple of the steps have deadlines that catch people out a year later. This is the checklist we would hand a mate who has just told their boss they are going it alone.

It is not legal or tax advice. It is the list of things to get done, with links to where the rules actually live, so you can have a sensible conversation with an accountant rather than paying one to explain the basics.

## The checklist

Work through these roughly in order. Most of them take an afternoon or less.

- Decide between sole trader and limited company (see the comparison below). If in doubt, ask an accountant for half an hour of their time before you register anything.
- Register: as a sole trader with HMRC for Self Assessment, or as a limited company with Companies House.
- Check whether you need to register for VAT now, or keep an eye on your turnover so you know when you will.
- Sort insurance: public liability as a minimum in practice, employers’ liability the day you take anyone on, and tools and van cover.
- Join any registration your trade legally requires (Gas Safe for gas work), and consider the schemes customers look for.
- Open a separate business bank account and pay every job into it.
- Set up a way to keep records from day one: a spreadsheet or bookkeeping app, plus a folder for receipts.
- Get a business phone number you will keep, a business email address and a domain name.
- Create a Google Business Profile and a simple website with your phone number, services, areas and photos of your work.

## Sole trader or limited company?

Most people starting a trade begin as a sole trader because it is quick and simple. GOV.UK says you can start trading straight away as a sole trader, but you are personally responsible for all the debts of the business, which is called unlimited liability. A limited company is a separate legal entity: the owners are responsible for its debts only up to the value of their investment, but there is more admin and more rules about taking money out.

The tax side is where it gets genuinely personal. Which structure leaves you better off depends on your profit, how you pay yourself and your wider circumstances, which is exactly the question an accountant is for. Plenty of trades start as sole traders and incorporate later once the numbers justify it.

**Sole trader vs limited company for a new trade business (UK, at the time of writing)**

|  | Sole trader | Limited company |
|---|---|---|
| Who you register with | HMRC, for Self Assessment | Companies House, before you start trading |
| Cost to register | Free | £100 online or £124 by post (Companies House fees at the time of writing) |
| How quickly | You can start trading straight away | Online registration is usually done within 24 hours |
| Liability for debts | Unlimited: you are personally responsible | Limited to what the owners have invested |
| Tax | Income Tax through Self Assessment, plus National Insurance | The company pays Corporation Tax on profits; directors may pay Income Tax and National Insurance on what they take out |
| Ongoing admin | Keep records and file a Self Assessment return | Annual accounts, a Company Tax Return and a yearly confirmation statement (£50 online at the time of writing) |
| Privacy | Your details are not on a public company register | Company details and directors are on the public Companies House register |

## Registering with HMRC or Companies House

As a sole trader, GOV.UK says you must register for Self Assessment if you earn more than £1,000 from self-employment in a tax year (6 April to 5 April). The deadline is 5 October after the end of the tax year in which you started, so if you started trading in the 2025–26 tax year you must tell HMRC by 5 October 2026, and registering late can bring a penalty. Once you are registered, HMRC sends you a Unique Taxpayer Reference.

For a limited company, you register with Companies House before you start trading. At the time of writing that costs £100 online, with most companies registered within 24 hours, or £124 by post, which takes 8 to 10 days. Since 18 November 2025, identity verification is a legal requirement for directors, and you will be asked for each director’s Companies House personal code when you register, so do that first.

Either way, keep an eye on VAT. You must register if your taxable turnover for the last 12 months goes over £90,000, or if you expect it to go over that in the next 30 days. For a busy trade taking on bigger jobs, that can arrive sooner than you think.

## Insurance, and the one that is a legal requirement

Employers’ liability insurance is the one the law insists on. GOV.UK says you must get it as soon as you become an employer, with cover of at least £5 million from an authorised insurer, and you can be fined £2,500 for every day you are not properly insured. There is an exemption if the only person you employ is a family member. Check the details before you take on your first apprentice or labourer.

Public liability insurance is not a legal requirement, but in practice you will struggle to work without it: many customers, letting agents, main contractors and trade schemes will ask to see it. Add cover for your tools and make sure your van insurance covers business use. Get quotes from a broker who deals with your trade rather than the first comparison-site result.

## Trade schemes: required, and expected

Some registration is the law. The Health and Safety Executive is clear that work on gas fittings in homes and workplaces must be done by a Gas Safe registered engineer who is qualified for that work, and that it is illegal for anyone else to do it.

Other schemes are about building regulations and trust. Competent person schemes, including NICEIC and NAPIT for electricians, let registered installers self-certify certain building work instead of going through building control each time. TrustMark and trade associations are voluntary, but customers do look for the logos, so once you have them, put them on your website and quotes.

## A separate bank account from day one

A limited company is legally separate from you, so its money is not your money. GOV.UK treats anything you take out that is not a salary, dividend or expense repayment as a director’s loan, which comes with its own rules, and keeping that straight is close to impossible without a dedicated company account. As a sole trader you are not strictly required to have a separate account, but mixing business and personal spending makes records far harder to keep and your tax return far more painful.

Pay every job into the business account, pay business costs from it, and your bookkeeping mostly takes care of itself.

## Get found: Google Business Profile and a website

Once the paperwork is done, customers need to be able to find you and check you are real. A Google Business Profile is free and is what puts you on Google Maps and the local results. If you work at customers’ addresses rather than your own, Google says to remove your address from the profile and list the areas you serve instead.

Alongside it, a simple website gives you somewhere to send people: your services, the towns you cover, photos of your work, your registrations and a phone number that is one tap away. It does not need to be big. Our guide to what pages a tradesman website should have covers the essentials, and we build exactly that kind of site from £99/month if you would rather not do it yourself.

> Pick your business name, phone number and email once, and use them identically everywhere: van, quotes, invoices, Google profile and website. Changing them later is a nuisance, and consistent details help customers and Google trust you are the same business.

## Questions

### Do I need to register as a sole trader before I start work?

You can start trading straight away as a sole trader, but you must register for Self Assessment with HMRC if you earn more than £1,000 from self-employment in a tax year. The deadline is 5 October after the end of the tax year in which you started, and registering late can mean a penalty.

### How much does it cost to set up a limited company in the UK?

Registering a limited company with Companies House costs £100 online or £124 by post at the time of writing. Online registrations are usually completed within 24 hours. Each director must verify their identity with Companies House first and give their personal code when the company is registered.

### Is public liability insurance a legal requirement for tradespeople?

Public liability insurance is not a legal requirement, but most tradespeople treat it as essential because customers, contractors and trade schemes often ask for proof of cover. Employers’ liability insurance is the one the law requires, as soon as you employ someone other than a family member.

### Should a new trade business be a sole trader or a limited company?

Most new trade businesses start as sole traders because it is quick, free and simple, then consider a limited company as profits grow. A limited company limits your personal liability for business debts but adds admin. The tax difference depends on your circumstances, so ask an accountant.

### Does a new trade business need a website straight away?

A new trade business does not need a big website on day one, but a simple one with your services, areas, photos and phone number helps customers check you are genuine. Pair it with a free Google Business Profile so you appear on Google Maps when people search locally.

## Sources

- Set up a business: legal structures, GOV.UK, 2026: https://www.gov.uk/business-legal-structures
- Set up as a sole trader, GOV.UK, 2026: https://www.gov.uk/set-up-sole-trader
- Register for Self Assessment if you’re self-employed, GOV.UK (HMRC), Returns for the 2025–26 tax year (register by 5 October 2026): https://www.gov.uk/register-for-self-assessment/self-employed
- Set up a limited company: register your company, GOV.UK (Companies House), 2026: https://www.gov.uk/limited-company-formation/register-your-company
- Companies House fees, GOV.UK (Companies House), Fees as updated 2 July 2026: https://www.gov.uk/government/publications/companies-house-fees/companies-house-fees
- When you need to verify your identity for Companies House, GOV.UK (Companies House), From 18 November 2025: https://www.gov.uk/guidance/when-you-need-to-verify-your-identity-for-companies-house
- Running a limited company, GOV.UK, 2026: https://www.gov.uk/running-a-limited-company
- Director’s loans, GOV.UK (HMRC), 2026: https://www.gov.uk/directors-loans
- Register for VAT: when to register, GOV.UK (HMRC), 2026: https://www.gov.uk/vat-registration/when-to-register
- Employers’ liability insurance, GOV.UK, 2026: https://www.gov.uk/employers-liability-insurance
- Gas safety for employers, Health and Safety Executive, 2026: https://www.hse.gov.uk/gas/employers.htm
- Competent person schemes: current schemes and how schemes are authorised, GOV.UK, 2026: https://www.gov.uk/guidance/competent-person-scheme-current-schemes-and-how-schemes-are-authorised
- Get started with Google Business Profile, Google Business Profile Help, 2026: https://support.google.com/business/answer/7039811?hl=en-GB
- Manage your service areas for service-area businesses, Google Business Profile Help, 2026: https://support.google.com/business/answer/9157481?hl=en-GB