Start a UK business — pick what kind.

Sole trader or Ltd?

For a single café under ~£50k turnover, sole trader is simplest. Once you take on staff, sign a long lease, or expect £90k+ turnover, Limited Company is usually better (limited liability + tax efficiency once profitable).

• Register with HMRC as self-employed by 5 October of your second tax year — via GOV.UK.
• Or form a Limited Company — Companies House, £50 online. Takes 24 hours.
• Open a business bank account. Required for Ltd; recommended for sole trader.

This is what trips people up.

• Register as a food business with your local council — at least 28 days before trading. Free. Triggers your first hygiene inspection.
• HACCP — written food safety plan. The FSA's free Safer Food, Better Business pack is acceptable.
• Food Hygiene Level 2 for everyone handling open food. Online courses ~£15–£30. Owner usually does Level 3.
• Allergen training. Natasha's Law (2021) requires full ingredient labelling on pre-packed-for-direct-sale food. Free training at FSA.
• Display the hygiene rating sticker — mandatory in Wales and Northern Ireland; not yet in England (but visible online means everyone sees it anyway).

Don't sign a lease until you've checked these.

• Use class. Premises must allow Use Class E (commercial, business and service) which includes cafés. Check with the council's planning team.
• Premises licence — only needed if selling alcohol, late night refreshment (11pm–5am) or playing live music. From ~£100/year.
• Business rates. Get the rateable value from GOV.UK. Small Business Rate Relief gives 100% off if rateable value <£12,000 (single premises).
• Waste carriers licence if you'll be disposing of waste yourself (not just using a council collection). Free for upper tier; £155 for lower tier.

The four policies a café needs.

• Public liability — £2m minimum, £5m typical. ~£200–£500/yr.
• Employers' liability — legally required from the day you have your first employee, even part-time. £5m minimum. ~£300/yr.
• Buildings & contents — if your lease puts the obligation on you (read the lease).
• Business interruption — cover lost profit if a flood, fire or pandemic closes you. ~£200–£600/yr.

What's actually available in 2026/27.

• Start Up Loans — British Business Bank, £500–£25,000 at 6% fixed. Free mentoring included. startuploans.co.uk
• Local council UK Shared Prosperity Fund — many councils run small grants (~£1,000–£5,000) for new high-street businesses. Search your council's "business support" page.
• The Prince's Trust — 18–30 only, free mentoring + grants up to £5,000.
• Sorted has a full grant finder. Open Find Grants →

Don't get caught out.

• VAT registration is mandatory once your rolling 12-month turnover hits £90,000 (2024/25 onwards). Standard rate 20%. Most café food is standard-rated; takeaway cold food is zero-rated; takeaway hot food is standard-rated. Get it wrong and HMRC will assess you.
• PAYE — register before your first payday. Run it through accounting software (Xero, QuickBooks, FreeAgent) or hire a bookkeeper.
• Self Assessment deadline 31 January each year. Set aside ~25% of profit for tax.

This decides everything else.

• Pure barber / hairdresser — no national licence. Council inspection rare. Apprentice-trained or qualified staff recommended but not required (England).
• Hair + ear piercing — ear piercing falls under Skin Piercing licensing in most councils. Register your premises and each piercer.
• Beauty salon (waxing, brows, lashes) — usually no licence, but check with council; some operate “Special Treatments Licences”.
• Anything injecting / breaking skin — microblading, dermal filler (when restrictions come in fully), micro-needling. Council licence + insurance always required.

Sole trader or Ltd?

• Single-chair barber — sole trader is fine.
• Multi-chair, rent-a-chair, or with treatments above — Ltd preferred. Limited liability matters once you have staff and clients with skin treatments.
• Register with HMRC for Self Assessment within 3 months of starting to trade.
• Companies House formation is £50 online, 24-hour processing.

Read your local council's special treatments policy.

• Use class. Salons are Use Class E. Most existing high-street units convert without planning permission.
• Skin Piercing / Special Treatments registration if relevant — usually £100–£400 one-off per premises plus ~£30 per piercer. Annual or one-off depending on council.
• Health and Safety Executive (HSE) basics — written risk assessment, sharps disposal contract, COSHH records for all chemicals (peroxide, dyes, etc).
• Waste carriers licence only if you transport waste yourself.

Public liability is the headline.

• Public liability — £2m minimum, more if doing treatments. Trade-specific cover (Babylon, Salon Gold, Insure Salons) is cheaper than generic.
• Treatment liability — covers the actual service (cuts, colour, treatments). Bundled with PL by most salon insurers.
• Employers' liability — required from your first employee, even apprentice. £5m minimum.
• Stock and equipment — for tools, dryers, chairs. Often bundled.

• Start Up Loans — same as café route. Up to £25,000 fixed-rate.
• The Prince's Trust — 18–30, grants + mentoring. Very strong for personal-services start-ups.
• Apprenticeship funding — once you have one apprentice. The Apprenticeship Levy means small employers pay 5% of training cost; the government pays the rest.

Almost everyone starts as a sole trader.

• Sole trader — right answer until you hit £30,000–£50,000 profit, when Ltd starts saving tax.
• Marketplace seller (Amazon, Etsy, eBay) — they handle a lot of the legal infrastructure but you still register with HMRC.
• Marketplace identity rules — new Online Marketplaces Act (2024) means platforms must verify seller identity. Have ID ready.

The single most-broken UK law in ecommerce.

• 14-day cancellation right. Distance-selling consumers can return goods for any reason within 14 days of receipt and get a full refund (including outbound postage). You have 14 days from receiving the goods back to refund.
• Mandatory pre-contract information. Total price including VAT and delivery, your full business name and address (not just a PO box), email, complaints route, returns policy. Has to be on your site BEFORE checkout.
• Confirmation in durable medium. Email confirmation must repeat all the above.
• Penalty for not disclosing return rights: the 14-day cancellation window extends to 12 months.

UK VAT is straightforward until you cross borders.

• VAT registration mandatory at £90,000 rolling turnover.
• Most ecommerce VAT is standard-rated 20%. Books, kids' clothes, some food are zero-rated.
• Selling to EU customers? Either use IOSS for low-value (under €150) or register for VAT in destination countries. Royal Mail and major couriers offer IOSS.
• Selling outside the UK and EU? Each destination country has its own duty and tax rules. Use a duty/VAT-handling courier (DHL, FedEx) for low-volume; for higher volumes, take regulated UK trade advice before scaling.

Often missed, fineable.

• ICO data-protection fee — required if you process personal data (you do). £40/yr for most sole traders / small Ltd. Renew annually. ico.org.uk
• Privacy policy on site. Use ICO's free template as a starting point.
• Cookie banner — PECR 2003 + UK GDPR. Must allow rejection of non-essential cookies as easily as accepting.

• Public liability — only essential if customers visit you. ~£80–£200/yr.
• Product liability — if you make or import goods (especially food, cosmetics, electricals, kids' products). Essential.
• Cyber liability — data breach response. £100–£300/yr. Increasingly standard.
• Stock cover — if holding inventory.

Insurance is the licence to operate.

• Sole trader or Ltd. Ltd from day one if you'll have employees or contracts over £50k.
• Public liability £5m — most commercial clients require it in their procurement standards. Without it, you can't bid.
• Employers' liability £5m required from first employee.
• Treatment / Care, Custody & Control cover — protects you when something in a client's property gets damaged. Often missing from base policies. Add it.
• Equipment cover for your kit.

This is what trips inspectors and clients.

• COSHH assessment for every chemical you use. Manufacturer data sheets are free; you build a one-page record per product. HSE COSHH guidance
• Method statements for each repeat job. Saves you on disputes and helps when clients ask for documentation in their audit.
• PAT testing — electrical equipment used in clients' premises. Annually.
• Risk assessments — written, signed, dated. Required by law for any business with employees.

• Waste carriers licence — if you transport waste (even your own commercial waste) you need Upper Tier registration with the Environment Agency, free.
• Clinical / sharps waste — if cleaning medical premises or anywhere with needles, you need specialist disposal. Don't put it in general waste.
• Trade waste contract for your own business waste. Most councils enforce this.

The actual business risk.

• Written contract every time. Late Payment of Commercial Debts (Interest) Act 1998 gives you statutory 8% + Bank Rate interest on late B2B invoices, plus a fixed compensation amount (£40–£100). Use it.
• 30-day terms maximum for SMEs is the standard the government promotes through the Prompt Payment Code. Push back on 60- and 90-day terms.
• Direct debit — for recurring residential clients, use GoCardless or similar. Drops late-payment to near zero.
• If a client won't pay: Money Claim Online (MCOL) handles claims up to £100,000 for ~£35–£455 in court fees depending on amount.

• Start Up Loans — cleaning businesses are well-suited (low capital requirement). Up to £25,000.
• Invoice finance — once you have B2B clients, factoring releases ~80% of invoice value immediately. ~3–5% cost. Helpful for cashflow.
• Local authority contracts — use Find a Tender (formerly Contracts Finder). Once you have employers' liability, public liability, COSHH records and a method statement library, you can bid.