This Guide is written for the UK tax year 2026/27 (6 April 2026 to 5 April 2027) and for the Companies House rules in force on 25 September 2026. Fees are as published by Companies House on 25 September 2026.
Scope
This Guide covers:
- choosing between working as a sole trader, forming a private company limited by shares, and setting up an ordinary partnership or a limited liability partnership (LLP), described at method level
- registering each of them: Self Assessment for sole traders and partners, incorporation at Companies House for companies and LLPs
- the Economic Crime and Corporate Transparency Act 2023 (ECCTA) changes that are already in force: identity verification for directors and people with significant control (PSCs), the registered email address, the "appropriate address" rule for the registered office, and the lawful purpose statement
- the first filings and registrations after formation: Corporation Tax, the first accounts, the confirmation statement, PAYE and VAT
It applies across England, Wales, Scotland and Northern Ireland. The LLP sections cite the Limited Liability Partnerships Act 2000, which covers Great Britain. Northern Ireland LLPs fall under the Limited Liability Partnerships Act (Northern Ireland) 2002, which has equivalent rules. It does not cover charities, community interest companies, companies limited by guarantee in any detail, limited partnerships, overseas companies registering a UK establishment, or regulated activities that need separate authorisation.
Related Guides: company accounts (uk-financial-statements), payroll (uk-payroll) and VAT returns (uk-vat-return). Where this Guide touches their subjects it gives only the registration step and points to them.
Ask the client first
- What will the business do, and when does it start? The date the business starts to trade (sole trader, partnership) or to carry on business (company) sets the Self Assessment and Corporation Tax deadlines.
- Who will own it and who will run it? One person alone, two or more people, or an existing company? A partnership or LLP needs at least two members. Every company director and every PSC must verify their identity with Companies House.
- Do the owners want the business to be a separate legal person with limited liability? A sole trader and the partners of an ordinary partnership are personally responsible for all the business debts.
- How much trading income is expected in the first tax year? A sole trader must register for Self Assessment if they earn more than £1,000 in a tax year. VAT registration is compulsory once taxable turnover goes over £90,000.
- Will anyone be paid through payroll, including a sole director paying themselves a salary? If so, PAYE registration must happen before the first payday.
- What address and email will the company use? The registered office must be an appropriate physical address in the UK, in the same part of the UK as the company is registered. The company must also have an email address that someone reads.
The method, step by step
- Choose the structure using the comparison table in "Choosing a structure" below. The tax differences are summarised there at method level. Work out the figures in the income tax, National Insurance, dividend and Corporation Tax Guides.
- Sole trader: start trading. Keep records from the first day. Register for Self Assessment if trading income in the tax year is more than £1,000. The notice is due by 5 October after the end of the tax year in which trading began (become a sole trader; TMA 1970 s7).
- Ordinary partnership: choose a name and a nominated partner. The nominated partner registers the partnership for Self Assessment, and every other partner registers separately, by 5 October in the business's second tax year (set up a business partnership).
- Company: before filing, make sure every proposed director has verified their identity and has a Companies House personal code, and every proposed PSC can supply theirs. Then choose a name, an appropriate registered office, a registered email address, articles, shares and shareholders, and the SIC code. Incorporate online (£100), by software (£100, or £156 same-day) or on paper form IN01 (£124). The application states that the subscribers form the company for lawful purposes (Companies House fees; CA 2006 s9).
- LLP: at least two members subscribe to an incorporation document, and at least two must be designated members. Register at Companies House (£100 by software, £156 same-day, £124 on paper). Every member registers for Self Assessment (set up and run an LLP).
- Corporation Tax (company): tell HMRC within 3 months after the first accounting period begins. That period begins when the company starts to carry on business, which is not only trading (FA 2004 s55; CTA 2009 s9).
- PAYE: register as an employer before the first payday, and not more than 2 months before it (register as an employer).
- VAT: test turnover at the end of every month. Register within 30 days of the end of the month in which rolling 12-month taxable turnover went over £90,000. If you expect taxable turnover in the next 30 days alone to go over £90,000, register by the end of that 30-day period (when to register for VAT).
- Diary the company's first filings: the first confirmation statement falls due 12 months after incorporation plus 14 days. The first accounts are due 21 months after incorporation (or 3 months from the accounting reference date if that is later) where the first period is more than 12 months. The CT600 return is due 12 months after the end of each accounting period, and Corporation Tax is payable 9 months and 1 day after the end of the period.
Choosing a structure
Most businesses start as a sole trader or a limited company. You can move from one structure to another, and gov.uk notes it is usually easier to move from sole trader to limited company than the other way (set up a business).
| Feature | Sole trader | Private company limited by shares (Ltd) | Ordinary partnership | LLP |
|---|
| Separate legal person | No | Yes | No | Yes |
| Liability | Unlimited: personally responsible for all business debts | Owners liable only up to their investment in shares | Partners personally share responsibility for losses and bills | Members not personally liable for debts the LLP cannot pay |
| Who can own it | One individual | At least 1 shareholder, who can also be the only director | Two or more partners; a company can be a partner | 2 or more members; a member can be a company |
| Registration | Self Assessment with HMRC | Companies House incorporation, then Corporation Tax | Self Assessment for the partnership (nominated partner) and each partner | Companies House incorporation, then Self Assessment for the LLP and each member |
| Public register | No | Yes: directors, PSCs, registered office, accounts | No | Yes: members, PSCs, registered office, accounts |
| How profit is taxed (method only) | Income Tax and National Insurance on the profits through Self Assessment | Corporation Tax on the company's profits; directors and shareholders pay Income Tax and National Insurance depending on how they take money out (salary, dividends, loans) | Each partner pays tax on their share of the profits | Each member pays tax on their share of the profits, as in an ordinary partnership |
| Accounts on the public record | No | Yes, every year | No | Yes, every year |
Sources: set up a business; set up a private limited company; set up a business partnership; set up and run an LLP.
Points of method when comparing:
- Company profit is taxed twice over, in two steps. The company pays Corporation Tax on its profits. The owner then pays Income Tax (and National Insurance on salary) on what they draw. A sole trader or partner pays Income Tax and National Insurance on the whole profit whether or not they draw it. Compare the two only with a full calculation from the rate Guides. Never compare headline rates alone.
- Corporation Tax rates (current, Corporation Tax rates): the main rate is 25% where profits are more than £250,000. The small profits rate is 19% where profits are £50,000 or less. Marginal Relief may apply between £50,000 and £250,000. In gov.uk's words, the limits are "proportionately reduced for short accounting periods and by the total number of 'associated companies' your company has". In practice they are shared between the company and its associates, so one associated company halves them.
- Making Tax Digital for Income Tax affects sole traders (and landlords), not companies. Anyone whose qualifying income was over £50,000 for 2024 to 2025 should have used it from 6 April 2026. The threshold is £30,000 for 2025 to 2026 (use from 6 April 2027) and £20,000 for 2026 to 2027 (use from 6 April 2028) (check if you're eligible for Making Tax Digital for Income Tax).
- Privacy. A company's and an LLP's directors or members, PSCs, registered office and accounts are public. A sole trader and an ordinary partnership appear on no public register.
- Public limited company (PLC). Rarely right for a new owner-managed business. A PLC needs at least two directors and a company secretary. Its allotted share capital must be at least the authorised minimum of £50,000, and each share must be paid up to at least one quarter of its nominal value plus the whole of any premium. It must not do business or borrow until Companies House issues a trading certificate (CA 2006 s154; s271; s763; s586; s761).
Registering the business
- You can start trading straight away without registering.
- 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). You can choose to register earlier.
- Deadline: by 5 October after the end of the tax year. In law, the notice is due within 6 months from the end of the year of assessment, unless HMRC has already sent a notice to file a return (TMA 1970 s7). For the 2025 to 2026 tax year (6 April 2025 to 5 April 2026), gov.uk gives the date as 5 October 2026. If you tell HMRC after that, you could get a penalty.
- You can trade under your own name or a trading name. A trading name is not registered anywhere, but it must follow the business name rules.
- Name. It cannot be the same as another registered company's name. It must usually end in "Limited" or "Ltd" (or "Cyfyngedig" or "Cyf" for a company registered in Wales). A "sensitive" word or expression, or a name suggesting a connection with government or local authorities, needs permission. You may have to change a name that is "too like" an earlier one if someone complains and Companies House agrees.
- Registered office and registered email address. See "ECCTA: what is already in force" below.
- Directors. At least one director, and at least one director must be a natural person. A director must be 16 or over. Directors do not have to live in the UK (CA 2006 s154; s155; s157). Each director must have verified their identity and must give their Companies House personal code in the incorporation filing.
- Company secretary. Not required for a private company. If appointed, the secretary cannot be the company's auditor.
- Shares and shareholders. At least one shareholder, who can be the director. There is no minimum share capital: a share can have any nominal value, for example £1. The statement of capital lists the shareholders, the number and total value of shares of each class, and the rights attached (the "prescribed particulars").
- PSCs. Identify anyone with more than 25% of the shares or voting rights, or other significant control. Include them in the statement of initial significant control (CA 2006 s9; PSC guidance).
- Memorandum and articles. Online, the memorandum is created automatically. Use the model articles or upload your own.
- SIC code and type of company. The application states the company type and its intended principal business activities.
- Lawful purpose statement. The application must state that the subscribers wish to form the company for lawful purposes. A company may not be formed for an unlawful purpose (CA 2006 s9(2)(e); s7).
- File and pay. The fees published on 25 September 2026 (Companies House fees) are:
| Filing | Online | Software | Paper |
|---|
| Incorporation of a company | £100 | £100 | £124 |
| Same-day incorporation | not available | £156 | not available |
| Confirmation statement (first in each 12-month payment period) | £50 | £50 | £110 |
| Incorporation of an LLP | not available | £100 | £124 |
| Same-day incorporation of an LLP | not available | £156 | not available |
Postal applications on form IN01 take 8 to 10 days. When registering online you are usually set up for Corporation Tax at the same time, unless the company is dormant. If you register by post, by agent or through software, add Corporation Tax services to the business tax account once the 10-digit UTR arrives. If no UTR has arrived 15 working days after registration, you can request it online (set up a private limited company).
- An ordinary partnership is not registered at Companies House.
- Choose a nominated partner. They manage the partnership tax return and keep the business records.
- The nominated partner registers the partnership for Self Assessment. The other partners register separately (online, or on forms SA400 for the partnership and SA401 for a partner).
- Deadline: by 5 October in the business's second tax year, or a penalty may be charged.
- The nominated partner should file the partnership return early enough for the partners to complete their own returns.
- For an LLP registered in Northern Ireland, the equivalent rules are in the Limited Liability Partnerships Act (Northern Ireland) 2002.
- Two or more persons carrying on a lawful business with a view to profit must subscribe to an incorporation document.
- The name must end in "Limited Liability Partnership" or "LLP" (or the Welsh equivalents for an LLP registered in Wales).
- There must be at least 2 designated members at all times. If the incorporation document would leave no designated members, or only one, every member is a designated member.
- Designated members register the LLP for Self Assessment, keep accounting records, send accounts and the confirmation statement to Companies House, and report changes. Every member also registers for Self Assessment as an individual.
- An LLP agreement is recommended. It sets out profit shares, decision-making, and how members join and leave.
- LLP members count as the equivalent of a director and must verify their identity. Corporate members of LLPs will be brought into identity verification at a later date (verifying your identity).
ECCTA: what is already in force
Only changes that have commenced are stated as law here. Later stages are listed separately as planned (outline transition plan).
From 4 March 2024: registered office, registered email and lawful purpose
- Appropriate address. A company must ensure its registered office is at all times at an appropriate address. That means an address where, in the ordinary course of events, a document delivered by hand or post would be expected to come to the attention of a person acting for the company, and where delivery can be recorded by obtaining an acknowledgement of delivery. Failing without reasonable excuse is an offence by the company and every officer in default (CA 2006 s86).
- In practice (set up a private limited company): the address must be a physical address in the UK, in the same part of the UK as the company is registered (a Scottish company needs a Scottish address). A Royal Mail PO Box, or a similar service from another company, can no longer be used. An accountant's or solicitor's address can be used with their permission, but it must meet every requirement. The address is public, so do not use a home address you want kept private. The address must be in place before you register. A company without an appropriate address can be struck off.
- Registered email address. A company must at all times have an appropriate email address, meaning one where emails from the registrar would be expected to come to the attention of a person acting for the company. It is given on incorporation and is not published. Failure is an offence by the company and every officer in default (CA 2006 s88A). A company that has not yet given one must give it in its next confirmation statement (confirmation statement guidance).
- Lawful purpose. The application to register must state that the subscribers wish to form the company for lawful purposes (CA 2006 s9). The company then confirms every year, on the confirmation statement, that its future activities are lawful.
- From the same date Companies House can query and reject filings and company names it suspects are wrong, fraudulent or misleading.
From 18 November 2025: identity verification for directors and PSCs
Identity verification became voluntary on 8 April 2025 and a legal requirement on 18 November 2025 (outline transition plan; rollout announcement).
- Who: directors, the equivalent of directors (including LLP members), PSCs, and Authorised Corporate Service Providers (ACSPs). In most cases a person verifies once and receives a Companies House personal code. They then use the code to link each role they hold (verifying your identity).
- How: free through GOV.UK One Login (by app, security questions, or at a participating Post Office), or through an ACSP. An ACSP must be registered with Companies House and supervised under UK anti-money laundering rules, and may charge a fee. Identity documents must not be posted or emailed to Companies House.
- New companies and new directors: the personal code of each director is given in the incorporation filing or the appointment filing (when you need to verify).
- Existing directors (transition): each gives their code in the company's next confirmation statement. The company cannot file the confirmation statement unless all its directors are verified. Companies House described this as a 12-month transition phase from 18 November 2025. It estimated that 6 to 7 million people would need to verify by mid-November 2026. Its plan says the transition for everyone on the register completes "by no earlier than the end of 2026", with compliance action to follow.
- PSCs. Each PSC gives their code through the "Provide identity verification details for a PSC" service within a 14-day window:
| PSC's situation | 14-day window to provide the code |
|---|
| Became a PSC after 18 November 2025 | On being added to the register, or within 14 days of being added |
| Already a PSC, and also a director of the same company | 14 days starting the day after the company's confirmation statement date. Filing the statement early does not move the window. The code is given separately for each role |
| Already a PSC, not a director of that company | The first 14 days of the PSC's birth month (born 22 January: the window starts 1 January) |
- If someone does not verify: it may be an offence, leading to prosecution and a fine or a financial penalty. A director who keeps acting after the deadline without complying commits an offence, and the company and all its directors may also commit one. Companies House says it will later mark the name on the register, and the person will be unable to be appointed as a new director or to register a new company.
- Not yet required: people who file at Companies House, limited partnerships, corporate directors, corporate members of LLPs and officers of corporate PSCs. These will be brought in later.
Planned, not yet in force on 25 September 2026
These appear in Companies House's outline transition plan and should not be treated as law until commenced:
- by no earlier than November 2027: identity verification of anyone who files documents, and a requirement for third-party agents filing for companies to be registered ACSPs (with at least 6 months' notice)
- from April 2028: accounts changes, including software-only filing and the end of abridged accounts (see uk-financial-statements)
- restrictions on corporate directors, on a date not yet fixed
Figures and deadlines, with years
| Item | Figure or deadline | Year / status | Source |
|---|
| Sole trader must register for Self Assessment | Self-employment income more than £1,000 in a tax year | Current, 2026/27 | become a sole trader |
| Self Assessment registration (sole trader, partner) | By 5 October after the end of the tax year (5 October 2026 for 2025 to 2026) | 2025/26 and later years | register for Self Assessment; TMA 1970 s7 |
| Partnership registration | By 5 October in the business's second tax year | Current | set up a business partnership |
| Company incorporation fee | £100 online or software; £124 paper; £156 same-day (software only) | Published 25 September 2026 | Companies House fees |
| LLP incorporation fee | £100 software; £124 paper; £156 same-day | Published 25 September 2026 | Companies House fees |
| Confirmation statement fee | £50 online or software; £110 paper, once per 12-month payment period | Published 25 September 2026 | confirmation statement guidance |
| Confirmation statement | At least once every 12 months; file up to 14 days after the review period ends | Current | confirmation statement guidance |
| Failure to file the confirmation statement | Fine of up to £5,000; the company may be struck off | Current | confirmation statement guidance |
| Corporation Tax registration | Within 3 months after the first accounting period begins | Current | FA 2004 s55 |
| First accounts (private company, first period over 12 months) | 21 months from incorporation or 3 months from the ARD, whichever is longer | Current | life of a company: accounts |
| Later accounts (private company) | 9 months from the ARD | Current | life of a company: accounts |
| Company Tax Return (CT600) | 12 months after the end of the accounting period | Current | Company Tax Returns |
| Corporation Tax payment | 9 months and 1 day after the end of the accounting period | Current | pay Corporation Tax |
| Corporation Tax rates | 25% main (profits over £250,000); 19% small profits (£50,000 or less); Marginal Relief between | Current | Corporation Tax rates |
| PAYE registration | Before the first payday; not more than 2 months before first paying people | Current | register as an employer |
| VAT registration threshold | Taxable turnover over £90,000 (rolling 12 months, or the next 30 days alone) | 2026/27 | when to register for VAT |
| PSC threshold | More than 25% of shares or voting rights | Current | PSC guidance |
| PLC authorised minimum | £50,000 nominal allotted share capital; each share paid up at least one quarter plus premium | Current | CA 2006 s763; s586 |
| Director minimum age | 16 | Current | CA 2006 s157 |
Boundary and exception table
| Situation | Rule | Source |
|---|
| Sole trader with self-employment income of exactly £1,000 in the tax year | The duty to register applies to income more than £1,000, so exactly £1,000 does not trigger it. Registering early is allowed | become a sole trader |
| HMRC has already sent a notice to file a return for the year | The section 7 duty to notify does not apply to that year. File the return by the date on the notice | TMA 1970 s7 |
| Company formed but not yet doing business | Usually dormant for Corporation Tax, so no accounting period has begun and the 3-month clock has not started. It must still file accounts and confirmation statements at Companies House | dormant for Corporation Tax; CTA 2009 s9 |
| Company "starts to do business" before its first sale | Business includes buying, selling, advertising, renting a property and employing someone. The accounting period, and the 3-month notice, can start before any sale | set up a private limited company; FA 2004 s55 |
| First accounts covering 12 months or less | The normal 9 months from the ARD applies, not 21 months | life of a company: accounts |
| Public company's first accounts over 12 months | 18 months from incorporation or 3 months from the ARD, whichever is longer | life of a company: accounts |
| Confirmation statement filed early | Choose a new confirmation statement date. The next review period starts the day after it. A second statement in the same payment period carries no extra fee | confirmation statement guidance |
| Sole director who is the only person paid | Must still register for PAYE before the first payday | register as an employer |
| Paying someone before the PAYE reference arrives | Run payroll, store the Full Payment Submission and send it late | register as an employer |
| Rolling 12-month taxable turnover of exactly £90,000 | Not over the threshold, so no duty to register yet | when to register for VAT |
| Turnover below £90,000 | Voluntary registration allowed, for example to reclaim VAT on expenses | when to register for VAT |
| Non-established taxable person (no UK establishment) supplying in the UK | No threshold: must register if it makes, or expects to make in the next 30 days, any taxable supply in the UK | when to register for VAT |
| Director also a PSC of the same company | The personal code is given separately for each role | when you need to verify |
| Service provider's address used as the registered office | Allowed only with permission, and only if it meets the appropriate address test | set up a private limited company |
| Changes to PSC information | Tell Companies House within 14 days of confirming the change | PSC guidance |
| Designated members of an LLP fall below two | Every member becomes a designated member | LLPA 2000 s8 |
Worked cases
Priya starts freelance design work on 1 June 2026 and expects about £8,000 of income by 5 April 2027. She has never filed a return.
- Her income is more than £1,000 in the 2026/27 tax year, so she must register for Self Assessment.
- The notice is due within 6 months from the end of the tax year: by 5 October 2027. She may register earlier.
- Her qualifying income is under the £20,000 Making Tax Digital threshold for 2026 to 2027, so on these facts she is not brought into Making Tax Digital for Income Tax from 6 April 2028.
- If her turnover goes over £90,000 on a rolling 12-month basis, she must register for VAT.
Company incorporated on 10 January 2026. It rents an office and starts doing business on 1 March 2026. It keeps its default accounting reference date.
- ARD: the last day of the month in which the first anniversary of incorporation falls, so 31 January 2027.
- First accounts: they cover 10 January 2026 to 31 January 2027, which is more than 12 months. The deadline is the longer of 21 months from incorporation (10 October 2027) and 3 months from the ARD (30 April 2027): 10 October 2027.
- Corporation Tax: the first accounting period begins on 1 March 2026, when the company starts to carry on business. Notice to HMRC is due no later than 3 months after that. Diary 31 May 2026 to be safe: that is one day earlier than the statutory limit, which on the corresponding-date rule runs to 1 June 2026. The period 10 January to 28 February 2026 is dormant for Corporation Tax.
- First confirmation statement: the review period ends 12 months after incorporation. The statement can be filed up to 14 days after that. Check the exact confirmation date on the register. It costs £50 online. The company cannot file it unless every director is verified.
On 15 July the business's taxable turnover for the last 12 months reaches £100,000, the first time it has gone over £90,000.
- It must register by 30 August (30 days after the end of July).
- Its effective date of registration is 1 September, the first day of the second month after going over.
Tom has held 40% of a company's shares since 2019 and is not a director. His date of birth is 22 January.
- He is a PSC (more than 25% of shares) who was registered before 18 November 2025.
- He must verify his identity and provide his personal code through the PSC service within the first 14 days of his birth month: 1 to 14 January.
- If he is appointed a director later, he must also give his code for the director role, separately.
A founder living abroad wants to use a Royal Mail PO Box in London as the registered office.
- Not allowed. A PO Box, or a similar service from another company, is not an appropriate address.
- Use a physical UK address in the company's part of the UK where post comes to someone acting for the company and delivery can be acknowledged. An accountant's or solicitor's address works with their permission.
- The directors themselves do not have to live in the UK.
A one-person company will pay its director a salary from 30 November 2026.
- It must register as an employer even though the only employee is the director.
- It must register before 30 November 2026, and cannot register more than 2 months before it starts paying: so no earlier than 30 September 2026.
- Payroll operation is covered in uk-payroll.
When to refuse or refer
- Refuse: any request to form a company as a shell for fraud or money laundering, to hide the true owners, to use someone's identity without their consent, or to get round identity verification. Companies House can query and reject filings and strike off companies formed on a false basis. Deliberately failing to identify PSCs, or giving false information, can be an offence.
- Refer to a solicitor or specialist accountant:
- bespoke articles, shareholder agreements, share classes with different rights, or an LLP agreement
- converting an existing sole trade or partnership into a company, where the transfer of assets, goodwill and any capital gains need a full calculation
- groups, holding companies, or a non-UK parent or owner (associated companies change the Corporation Tax limits, and residence can change the whole answer)
- charities, community interest companies, companies limited by guarantee, limited partnerships and PLCs
- activities regulated by the FCA or needing a licence
- a person who is disqualified or bankrupt and wants to be a director. They need permission from the court
- failed identity verification, or a question on the Post Office or ACSP route that the published guidance does not answer
- Point to a related Guide: accounts preparation and exemptions (uk-financial-statements), payroll (uk-payroll), VAT returns and schemes (uk-vat-return).
Filing and payment
- Companies House, every year: the confirmation statement, filed at least every 12 months and within 14 days after the review period ends. It carries the lawful purpose confirmation and, for existing directors, their personal codes. Also the annual accounts: first accounts as above, then 9 months from the ARD for a private company. A dormant company still files both (dormant companies; confirmation statement guidance).
- HMRC, company: file the CT600 within 12 months after the end of each accounting period, and pay Corporation Tax within 9 months and 1 day after the end of the period. There may be 2 accounting periods in the year the company is set up (pay Corporation Tax; Company Tax Returns).
- HMRC, sole traders, partners and LLP members: Self Assessment returns once registered. The nominated partner or the designated members also file a partnership return.
- Company registers: every company must keep a register of its members, entering their names and addresses and the dates each became and ceased to be a member (CA 2006 s113). Check it when identifying PSCs (PSC guidance).
- Payroll and VAT: once registered, follow uk-payroll and uk-vat-return.
Registrations due now for the previous year (2025/26)
Anyone who started self-employment, or became a partner, between 6 April 2025 and 5 April 2026 and has not received a notice to file must tell HMRC by 5 October 2026. After that date a penalty may be charged (register for Self Assessment).
Completion checklist