How To Register For Small Business

There's a lot y'all need to remember about when starting your own business organization in the Britain , from financing and budgeting to finding your first customers. 1 of the about crucial steps in the planning stages, all the same, is registering with HMRC.

In this commodity, we'll pause how to do information technology down into four simple steps.

Iv steps to registering your small business organisation

1. Choose the right business structure for you

The first decision to make when getting set up to register is what kind of business you lot're going to ready upwardly.

In the United kingdom of great britain and northern ireland, at that place are three singled-out legal structures to choose from. We'll summarise each of them hither.

Sole traders

This is the simplest blazon of business to set up.
Y'all are personally responsible for your business'southward debts and accounting.

Limited companies

This is more complicated than either of the other options, requiring y'all to register with both HMRC and Companies House.
Information technology requires you to consummate and file audited accounts, which are completely carve up from your personal tax return.
It potentially allows you to take home more money, using dividends to make the tax organisation work for you.
You lot have no personal liability for business debts.

Partnerships

This is the simplest way to gear up a business involving ii or more people.
Responsibility for business debts and accounting is shared between the partners.

Equally y'all can see, the main difference betwixt the dissimilar types of business concern construction is in who is liable for the concern's debts. Information technology was much more pop for new entrepreneurs to set up as sole traders in the past, but more and more than are establishing limited companies as it becomes easier to do so.

As you can run across, the main deviation between the different types of business organisation structure is in who is liable for the business's debts.

Run into our more detailed guide to learn which option is right for you, or acquire more about partnerships from the government.

2. Choose the name you want to trade under

Whichever structure you choose, you'll need to accept a proper name for your business when you register..

In some cases, this is uncomplicated. Sole traders in particular tend to trade under their own proper name, while partnerships can incorporate nether the founding partners' names.

For sole traders and partnerships, your name cannot:

be offensive or contain a 'sensitive' word or expression
exist the same equally an existing trademark
imply connections to government or local government (without permission)
include 'limited', 'ltd', 'limited liability partnership', 'LLP', 'public limited company' or 'PLC'.

Limited companies, meanwhile, are subject to restrictions including not registering under a name that is the 'same as' or 'too similar' an existing company.

Within these restrictions, though, you have a lot of leeway, which means you can go artistic! Remember, a good proper name can exist a valuable tool in marketing your business.

three. Bank check what records you'll need to go on

Different types of business organization volition demand to continue different records. We already noted that, different sole traders, limited companies need to keep professionally audited annual accounts.

Anyone who is cocky-employed, meanwhile, will need to fill out an annual Self Assessment revenue enhancement return – a process that includes calculating your National Insurance Contributions (NICs).

On top of all this, you'll demand to keep additional records if you lot hire employees or charge VAT, and many sectors will have additional record-keeping requirements for things like insurance.

At this stage, it's absolutely crucial that you lot practise a lot of detailed enquiry on the field y'all're going into.

four. Register for tax

Finally, you demand to actually register. This is to let HMRC know that you're going to be trading equally a business organisation and how you're going to be doing it.

Luckily, if you already know things like which business structure y'all're going with, that process is quite easy. The government's site volition walk you through it quite well; you just need to make sure you lot accept the relevant information to hand.

Registering with Companies House (limited companies only)

In addition to registering with HMRC, express companies will likewise need to register with Companies Business firm.

This extra stride costs just £12 and your company is usually registered inside 24 hours. Y'all must provide at least three pieces of personal information virtually yourself and your shareholders or guarantors, and you tin can use the aforementioned service to gear up up Pay Every bit You Earn (PAYE) for your employees.

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QuickBooks screenshot

When should I register my small concern?

In general, the reply to this question is simple: yous need to register your business with HMRC as soon as possible.

More specifically, HMRC volition mostly marker your start date in 1 of ii ways:

the engagement when you lot commencement provide goods and services for sale
the date when yous start marketing your business organization

If y'all fail to register inside three months of either of these, you'll have to pay a £100 late fee – and that figure can increase to equally much equally £1,600 if yous keep to put it off.

You've registered your business - what's next?

Nosotros hope you've found this short guide to registering your business organisation with HMRC helpful. Be sure to click through to our more detailed explainers or to the government'south ain pages to learn more most which construction is right for you and how to get formally gear up. And don't forget to run through our checklist for starting your own business organization in the UK to get a personalised list of steps that you have yet to run through.