When you start a business in the UK, it can feel like there is a lot of things to do all at once. Sharing the news with friends is the fun part, but are you missing anyone important? There is a lot of information out there. So it's tricky knowing who to tell and when!
In this blog we will guide you through all the different organisations you may need to tell. Covering the when and the whys along the way.
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Let's get the big one out the way first. If you are choosing to be a sole-trader or a partnership, you will need to register for self assessment. But you do may not need to do this straight away. It all depends on which business structure you are creating.
After you meet the criteria to register, you have until the 5th October of the next tax year. The tax year runs from 6th April to 5th April. For example the tax year at the time of writing is 06 April 2025 to 05 April 2026. The registration criteria will be different depending on your business structure. Read about the differences further in this blog. Here is the link: Sole trader vs partnership.
As an example, a sole trader earning more than £ 1,000 in the tax year 2025 - 2026, will have until the 5th October 2026 to register. Sole traders can also do this before they hit this threshold. You may do this because:
Make sure to register as soon as you qualify. This is because HMRC will need to send you a Unique Taxpayer Reference (UTR) via the post and create a government gateway. This takes up to 15 days but can take longer during busy periods.
We recommend adding reminders to your calendar for the deadlines / expected delivery dates. This helps you notice early if there is an error and ensure you stay on track.
There are lots of reasons you may end up late in registering. For some people the worry this causes can lead to avoidance. Thankfully, HMRC are actually very understanding. The important thing is too be the one who tells them and to do so as soon as possible. The fines will be worst if HMRC have to approach you.
If you struggle with speaking to people by phone then HMRC does have an extra support team. You can even webchat with them! Here is the link: HMRC Extra Support Webchat - This team can also help with PAYE queries.
Explain your situation and they will be able to register you with the correct start date. Depending on the reasons for you missing the deadline, they may waive any fines too. You can even outsource this by going to accountant like us. We can get you registered and up to date with HMRC without any judgement. Plus we have experience in appealing fines on the grounds of neurodiversity.
This is the most common business structure in the UK. It is a form of self employment, where you are personally liable for any debts or profit. Being a sole-trader means you can wait to register.
HMRC only want to know after your total income passes £ 1,000 in the same tax year. By "income" they mean your total sales, not profit. This is a common misunderstanding. If you are earning less than £ 1,000, you won't need to register or do a self assessment.
To see if you are hitting the target, add up the total sales from all your self-employment. You do not include money received from your employer or benefits. HMRC have an online checker. Here is the link: Check if you need to send a Self Assessment tax return
Lets look at some examples:
Over the last tax year, Alex made £ 300 in sales on their Etsy shop and £ 800 from gigs. In total, their income was £ 1,100. This is £ 100 over, so they will need to register and complete a tax return. They do need to register.
| Income for 2024 - 2025 | Value |
| Etsy Sales | £ 300 |
| Gig Invoices | £ 800 |
| Total Income | £ 1,100 |
But if Alex only took £ 100 in sales Etsy shop they would not need to register. This is because their total income was under £ 1,000. They do not need to register.
| Income for 2024 - 2025 | Value |
| Etsy Sales 2024-25 | £ 100 |
| Gig Invoices 24-25 | £ 800 |
| Total Income 24-25 | £ 900 |
Remember, if Alex had a job or received benefits, we do not include that money when working this out. This means they can earn more than £ 1,000 in total but still not need to register if their self-employment sales were under the threshold.
You need to register for self-assessment from day one of your Partnership business. There are some extra steps too, these are;
A partnership agreement is the contract that outlines the responsibility and share of ownership for all the partners. A partner must be a 'legal entity'. This means they can be an individual or a Limited Company.
The people in your partnership, will need to register for self-assessment from day one. Meaning you do not wait for the first £ 1,000 in sales. The nominated person is one of the partners from the agreement. They are responsible for;
These duties can be outsourced to accountant or bookkeeper too. In this situation, the nominated person is responsible for ensuring the accountant has everything they need to do the work.
Starting a business is considered a change of circumstances for most benefits. For example Universal Credit. This is because it changes both your income and responsibilities.
The welfare system is always changing and currently under review. This means it's more important than ever to research how starting a business could impact your claim. For example, you may be given restrictions / requirements on how much you earn. The business structure you choose can also change things.
Watmore and Co. is founded by disabled entrepreneurs, meaning they have personal experience of dealing with benefits and business. In their experience welfare departments were not trained fully on how self-employment effects your claim. Sometimes this resulted in them needing to quote from government legislation in order to get things corrected.
But as we are not experts in benefits. With the complexities in benefit rules, we suggest contacting charities like Turn To Us. They are experts on benefit questions and can offer specific advice on being your own boss while on benefits. Here is a link to one of their articles Self Employment: What benefits can I claim if I am self-employed?
If you are disabled, consider applying for Access To Work (ATW). It's a benefit specifically for supporting disabled individuals in the workplace. It supports employees, directors and the self-employed. Neurodiversity is applicable and currently you do not need a diagnosis. There is even a fast track option for new roles and you can apply up to 4 weeks before your start date. However, ATW are currently behind especially for self-employed applications.
You will be asked to provide previous tax returns. If you have not done one before, they will require a business plan instead. Your business plan will need to forecast you meeting the lower earnings limit (LEL). This was £ 6,396 for the tax year 2024 to 2025.
You can find information and support from the charity Scope and Alice Hastie's Facebook Group. Here are the links: Scope Access To Work and Access To Work Claimants.
If you want your business to be considered a separate legal entity by HMRC, you will need to register it with Companies House. This happens when you choose one of the following business structures;
If you are building a charity, you will register with the Charity Commission instead.
You can pay someone to set up your business. Whilst this is not a service offered by Watmore and Co. Accounting, we do have contacts and can help you find someone.
Once registered, the following details will be made public:
You can request some of these details to be hidden, but only under special circumstances such as domestic abuse survivors. Our accountancy firm like many, offer a registered office service. This means it is our address that shows, not yours. It also means we handle all your post and shred the junk on your behalf!
The information commissioner's office are more commonly known as the ICO. They are the regulator of data protection and other information rights. There is an annual data protection fee which most business will be legally required to pay. This includes sole traders.
The Data Protection Act 2018, means that any organisation who processes personal information must pay. The amount you pay depends on the size of your business. Use their online ICO Checker, to check if you need to register and how much you'll need to pay. You can find more information about what the fee pays for and exemptions from their website. Here is a link to their Data Protection Fee page.
This depends on the type of services and / or products you are planning on selling. Some are legal requirements. Most are more symbolic and gives your clients confidence.
A professional body typically has a code of ethics which all members must agree to and meet. They often provide training, peer support, advice, insurance and even discounts to their members. Here is an example:
Accountants and Bookkeepers: Legally we only need to have Anti-Money Laundering (AML) supervision. This can be got directly from HMRC, however most professional bodies and memberships offer AML supervision too.
Watmore and Co. Accounting, are supervised by ICB (institute of certified bookkeepers). We are also ICPA members (institute of certified practicing accountants). They provide us with CPD training and updates on upcoming changes from HMRC. We can also get advice on how best to support a client. This is particularly helpful when handling more complex cases.
Another example would be Ofsted. Whilst childcare providers do not have to be registered with Ofsted, doing so can expand their client base.
Make sure you get insured! No seriously. It is vital to get the right insurance. The type you need depends greatly on your type of products and services. There are also additional insurances which are legally required, such as Employers Liability Insurance. This is required if you are paying anyone other than the directors through payroll.
At Watmore and Co. we highly recommend getting legal cover too. This can help massively if you need to deal with small claims for unpaid invoices. It's much cheaper to have the cover already in place than to only pay for it when needed.
You can also get something called HMRC Investigation Insurance. This is offered by some accountants and bookkeepers. It covers all the additional work needed if you are chosen for a HMRC investigation. This included talking to HMRC on your behalf, making it much quicker and as painless as possible!
There is lots to think about when starting out. But by breaking it down you can plan ahead. The best way to seek advice is from joining your professional body and finding communities. Be that for your business type, your niche or just similar business owners. These groups often share their wisdom, helping you answer any burning questions. Or at least know where to start looking!
Do you feel more confident in what to do next? If you have any more questions, check out our other blogs in the Launching Your Business series. Alternatively, Watmore and Co. offer a free consultation. Book today with the following link to help you start your business confidently. Book a Free Call.
Stock image ©Elizabeth Rajchart via Canva.com