Start, run and protect a UK business — the calm way.

1. Which structure — sole trader, partnership, LLP, Ltd, or CIC?

This is the first real decision. There is no single "right answer" — only the right answer for you, today. Most first-time UK business owners start as a sole trader because it's free and simple, then incorporate to a Ltd once income, risk, or clients demand it.

The two real choices for most people

2. Choosing & protecting your business name.

A name has to clear four checks — legal, domain, social, and trademark — before you commit to it. Skip any and you can lose months.

The four checks

1. Companies House check — the name (or anything too similar) mustn't already be registered. Search live at find-and-update.company-information.service.gov.uk. Or use Sorted's Check this firm tool for a friendlier interface.
2. Domain check — you want at minimum a .co.uk or .uk. Search via Nominet or any registrar.
3. Social handle check — a quick search of Instagram, TikTok, LinkedIn, and X. Even if you don't post yet, claim the handles before someone else does.
4. Trademark check — the Intellectual Property Office register at gov.uk/search-for-trademark. A registered trademark beats a Companies House name in any dispute.

Names you can't use

• Anything that's the same as — or "too similar to" — an existing registered name.
• Sensitive words without permission: words like Royal, Crown, Bank, Group, British, English, National, Trust, Federation, Institute, Authority, University, Architect, Optician. The full list of sensitive words is on GOV.UK.
• Anything offensive or that suggests a connection with government you don't have.
• For Ltds, the name must end with "Limited" or "Ltd" (or the Welsh equivalents).

Trading names — the legal version vs the marketing version

You can register a Ltd as "Husseyn Holdings Ltd" but trade publicly as "Sorted". You just have to show the full registered name on official documents (invoices, letterhead, website footer) and at any business premises. This is the standard pattern for small UK businesses.

3. Your first 30 days, in order.

Most people get stuck because the official advice doesn't tell you the order. Here's the actual order.

4. Real costs to expect in year 1.

The unavoidable government and infrastructure fees. Not marketing budget or office rent — just what you genuinely cannot skip.

Bottom line: a sole trader can legally trade for £0–£60. A limited company costs about £100–£150 to set up properly with insurance, then averages £60–£200/month depending on whether you use an accountant.

5. How tax actually works in 2026/27.

For your real numbers, use the GOV.UK calculator or talk to an accountant. Rates below are 2026/27 (England, Wales & NI — Scottish rates differ for Income Tax).

If you're a sole trader

Sole-trader deadlines you must hit

• Tax year: 6 April → 5 April
• Online Self Assessment filing deadline: 31 January (10 months after year-end)
• Tax payment deadline: 31 January (balancing payment) and 31 July (first payment on account for next year)
• Paper return deadline: 31 October (most people file online so this rarely matters)
• Penalty for late filing: automatic £100, even if you owe nothing. Then £10/day after 3 months.

If you're a limited company

Ltd company deadlines you must hit

• Accounting reference date: usually the last day of your incorporation month, in the next year
• Statutory accounts: due at Companies House 9 months after your accounting year end
• Confirmation statement: due at Companies House every 12 months (£34)
• Corporation Tax return (CT600): due at HMRC 12 months after year-end
• Corporation Tax payment: due 9 months and 1 day after year-end (yes, before the return)
• Penalty for late accounts: £150 (1 month late) rising to £1,500 (over 6 months)

The salary + dividends pattern (most small Ltd directors)

The standard tax-efficient pattern: pay yourself a small salary up to the NI threshold (~£12,570) and take the rest as dividends. The salary is a tax-deductible expense for the company. You pay no Income Tax on it (covered by your personal allowance) and almost no NI. Then dividends are taxed at 8.75% in the basic band — lower than 20% Income Tax. But: dividends are paid from after-tax company profits, so Corporation Tax (19%) already came off. Net effective rate is roughly 25.7% — still usually better than sole-trader rates above ~£40,000 profit.

This stops being efficient if you need most of the money personally. Talk to an accountant — their fee usually pays for itself in year 1.

6. VAT — when, how, which scheme.

VAT is the tax most new businesses get wrong. Here's the truth about when you have to register, when you might want to register voluntarily, and which scheme to pick.

When you MUST register

• Your VAT-taxable turnover (sales subject to VAT — not profit) exceeds £90,000 in any rolling 12-month period.
• You expect to exceed £90,000 in the next 30 days (e.g. you signed a big contract).
• You must notify HMRC within 30 days of crossing the line. Penalties are based on a percentage of VAT due, so they grow fast.
• Threshold is fixed for 2024–2026 — HMRC may change it from April 2027.

When you might choose to register early

• You sell mostly B2B — your customers reclaim the VAT anyway, so they don't care.
• You spend a lot on VAT-bearing expenses (equipment, software, professional services) — you can reclaim the input VAT.
• You want to look bigger/more established to bigger clients.
• Don't register early if you sell mostly to consumers who can't reclaim — it makes you 20% more expensive overnight.

VAT schemes — pick one

Making Tax Digital for VAT (MTD)

Compulsory for all VAT-registered businesses. You must keep digital VAT records and submit returns via MTD-compatible software (FreeAgent, Xero, QuickBooks, Sage all work). You cannot file VAT returns through the old HMRC website any more. Sign up at gov.uk/sign-up-for-making-tax-digital-for-vat.

VAT rates you'll see

• Standard rate: 20% (most things)
• Reduced rate: 5% (e.g. domestic gas/electricity, children's car seats, some renovations)
• Zero rate: 0% (most food, books, children's clothes, public transport, new house construction) — you still record the sales, but no VAT is charged
• Exempt: not VAT-able at all (insurance, education, finance, postage). Different from zero-rated — you can't reclaim input VAT on related expenses.

7. Hiring your first employee.

Hiring is the biggest legal step-up. Get it right and you can grow safely; get it wrong and you face tribunal claims and HMRC penalties.

Before they start — the checklist

PAYE in plain English

PAYE (Pay As You Earn) is how you collect Income Tax and National Insurance from employees before paying their wages. Each payday you send HMRC a Full Payment Submission (FPS) through your payroll software. Then you pay HMRC monthly (or quarterly if liability is under £1,500/month). All MTD-compatible payroll software does this for you automatically.

Automatic enrolment pensions

The day you hire your first employee, you become a pension "employer". You must:

• Assess every employee — if they're 22+ and earn £10,000+/year, you must auto-enrol them in a workplace pension within 6 weeks.
• Contribute at least 3% of qualifying earnings; employee contributes at least 5% (8% total minimum).
• Use a scheme — NEST is free and government-backed, or use The People's Pension, Smart Pension, or NOW: Pensions.
• Re-enrol every 3 years.
• Fines for non-compliance start at £400 fixed, plus £50–£10,000/day depending on staff numbers.

National Living Wage / National Minimum Wage (2026/27 rates)

HMRC actively investigates underpayment. Penalties: 200% of underpayment, public naming, and back-payments going back 6 years.

Statutory rights from day one

• Written statement of particulars (day 1)
• Itemised payslip (every payday)
• 5.6 weeks paid holiday per year (pro-rata for part-time)
• Statutory Sick Pay (SSP) after 4 days off sick — £118.75/week for up to 28 weeks
• Statutory Maternity Pay (SMP) — 90% of average weekly earnings for 6 weeks, then £187.18/week for 33 weeks
• Right to request flexible working from day 1
• Protection from unlawful discrimination (Equality Act 2010) — from before they're even hired
• Auto-enrolment pension assessment

Workers vs employees vs self-employed

Three different statuses with very different rights. Employees have full employment rights. Workers (e.g. zero-hours, casual) get holiday, NMW, and protection from discrimination but not unfair dismissal. Self-employed contractors get no employment rights but must invoice you and handle their own tax. The legal test is reality, not the contract — you cannot call someone self-employed if you control their hours, supply their tools, and they only work for you. HMRC's CEST tool gives the official answer.

8. If you do contract work — IR35.

If you work through your own Ltd company for clients, you must understand IR35. It's the rule that decides whether you're genuinely an independent contractor (taxed lightly) or a "disguised employee" (taxed like an employee, plus employer NI on top).

The basic test

HMRC looks at the day-to-day reality of the work. The three core questions:

1. Control: who decides what, how, when, and where the work is done? If the client does, that points to employment.
2. Substitution: could you genuinely send a substitute to do the work? If no (or only with client approval), that points to employment.
3. Mutuality of obligation: is the client obliged to give you more work, and are you obliged to take it? If yes, employment.

Who decides — and who pays

• Working for a small private-sector client (turnover under £10.2m, fewer than 50 employees, balance sheet under £5.1m): you decide your IR35 status. If inside, your Ltd pays employment-level tax.
• Working for a medium or large private-sector client, or any public-sector body: the client decides and the fee payer (often an agency) deducts tax at source — you receive the net amount.
• Disagree with the client's status determination? You can challenge it in writing — they must reply within 45 days.

9. Record keeping & Making Tax Digital.

Keep the right records, for the right length of time, in the right format — and tax becomes almost boring.

What you must keep

• All sales and income (invoices, receipts, bank statements, till rolls)
• All business expenses (receipts, mileage logs)
• VAT records if registered (invoices in and out, VAT account)
• PAYE records if you employ people (payroll, P60s, P11Ds)
• Bank, credit card, and PayPal/Stripe statements
• Asset purchases (capital allowances)
• Personal tax records: bank interest, dividends, P60s

How long to keep them

Making Tax Digital (MTD) — the schedule

• VAT-registered businesses: already in MTD. Digital records, MTD-compatible software, no exceptions.
• Sole traders & landlords with income over £50,000/year: MTD for Income Tax starts April 2026. You'll submit quarterly updates plus a final declaration.
• Sole traders & landlords with income £30,000–£50,000: MTD for Income Tax starts April 2027.
• Below £30,000: not in MTD yet — date to be confirmed.
• Ltd companies: MTD for Corporation Tax not before 2026 (consultations ongoing).

Use one of the HMRC-approved software packages. Spreadsheets work for MTD only if you use "bridging software" to submit.

Allowable expenses — the rule

The legal test is "wholly and exclusively for the purposes of the business". The most commonly missed legitimate expenses:

• Use-of-home: a fixed rate of £6/week (£26/month) or proportion of actual costs
• Mileage in your own car: 45p/mile for first 10,000 business miles, 25p after
• Phone & broadband: business proportion
• Professional subscriptions (HMRC-approved list)
• Training that maintains existing skills (not new ones — that's capital)
• Bank charges, accountant fees, software, web hosting
• Stationery, postage, work uniforms with a logo
• Pension contributions (for Ltd directors, paid by the company — very tax-efficient)

10. Do you need a licence?

Some UK businesses can't legally trade without one. The official GOV.UK Licence Finder asks four short questions and gives you the exact list.

Common ones to watch for

• Selling food: Food Business Registration — free, mandatory, must be done 28 days before you start (even a one-person home kitchen baking cupcakes for sale). At gov.uk/food-business-registration.
• Selling alcohol: premises licence (council) + personal licence holder.
• Childminding: Ofsted registration. Background checks, training, ongoing inspections.
• Driving for hire (taxi, private hire, Uber/Bolt): private hire licence from your local council. DBS check.
• Construction / trades: may need a Gas Safe registration, NICEIC for electrical, F-Gas for refrigeration.
• Selling at scale on Amazon/eBay/Etsy: you may need to register as a "trader" with the local council Trading Standards, especially for cosmetics, electricals, or toys (CE/UKCA marking).
• Cleaning services going into homes: generally no licence, but enhanced DBS if working with vulnerable people.
• Mortgage or insurance advice: FCA authorisation — serious money and serious paperwork. Don't dabble.

11. Business insurance — what's legally required.

Most insurance is optional. One is legally required. A few more save businesses every week.

Compare via brokers like Simply Business, Hiscox, AXA Connect, or your accountant's recommendation. UK insurance brokers are paid by commission — the advice is free to you.

12. Data protection & the ICO fee.

UK GDPR applies to almost every business that handles personal data — including just having a customer list, email addresses, or CCTV.

Step 1: pay the ICO fee

Most businesses that process personal data must pay the Information Commissioner's Office annual fee:

Pay at ico.org.uk/data-protection-fee. Maximum penalty for not paying: £4,350.

Step 2: do the basics

• Have a privacy notice on your website — what data you collect, why, how long you keep it, who you share it with, the legal basis (consent / contract / legitimate interest), and how to exercise rights.
• Get consent for marketing — pre-ticked boxes are illegal. Use a clear opt-in.
• Honour data subject rights within 1 month — access, deletion, correction, portability.
• Report breaches within 72 hours if they risk people's rights — to ICO and (in serious cases) affected individuals.
• Keep a record of what data you hold and why (Article 30 record) — not always mandatory below 250 staff, but always sensible.
• Cookie banners — if your site uses non-essential cookies (analytics, ads, embedded media), you need a compliant consent banner.

Penalties

For serious breaches: up to £17.5 million or 4% of global annual turnover (whichever is higher). Most small-business fines are much smaller and the ICO usually engages before fining — but the rules apply equally.

13. Intellectual property — trademarks, copyright, patents.

Four types of IP exist in UK law. Each protects something different, and only some need registration.

Trademarks (registered)

• Protects: your business name, logo, or product name.
• Apply: gov.uk/how-to-register-a-trade-mark
• Cost: £170 for one class (£50 for each additional class)
• Lasts: 10 years, renewable indefinitely
• Tip: search the existing register before you spend — an existing trademark can block yours. Use the free IPO search.

Copyright (automatic)

• Protects: writing, art, photos, music, software code, films — anything original you create.
• Cost: £0 — copyright exists automatically the moment you create the work.
• Lasts: 70 years after the author's death (usually).
• Tip: add a copyright notice (© Your Name 2026) to anything you publish — not legally required but useful for proving ownership.

Registered design

• Protects: the visual appearance of a product (shape, pattern, colour).
• Apply: gov.uk/register-a-design
• Cost: from £50 for one design.
• Lasts: up to 25 years (renewable every 5).

Patents

• Protects: inventions — how something works, not what it looks like.
• Apply: gov.uk/patent-your-invention
• Cost: £60–£4,000+ depending on whether you use a patent attorney.
• Lasts: up to 20 years.
• Reality check: most small businesses won't need a patent. Use trademarks and copyright instead.

14. Health & Safety obligations.

Even a one-person home-based business has H&S duties. Most are common sense, but the law expects them written down once you have employees.

If you're self-employed only (no employees)

• You have H&S duties to people who could be harmed by your work (customers, members of the public, suppliers).
• If your work is low-risk (e.g. writing, consulting, photography), formal documentation isn't required.
• Risk-bearing trades (electrical, construction, food, beauty, gas) have specific industry rules.

From your first employee onwards

• Conduct a written risk assessment — identify hazards, who could be harmed, what you've done to control them.
• Have a written H&S policy if you have 5+ employees.
• Display the HSE Law poster or provide each employee with the equivalent leaflet (free from hse.gov.uk).
• Provide free first aid arrangements appropriate to the workplace.
• Report serious workplace accidents under RIDDOR — at hse.gov.uk/riddor.
• Provide free training and PPE where needed.

Fire safety

If you have a workplace (shop, office, warehouse, premises members of public visit) you are the "responsible person" under the Regulatory Reform (Fire Safety) Order. You must: do a written fire risk assessment, provide fire detection and means of escape, train staff, keep records. Local Fire and Rescue Service can inspect any time. Penalty for serious failure: unlimited fines, up to 2 years prison.

15. Contracts, T&Cs & getting paid.

A signed contract is the single best thing you can do to avoid disputes. Late-payment law is on your side, but only if your paperwork is clean.

Minimum to include in a contract or T&Cs

• Who the parties are (full legal names and addresses)
• What you'll do (the deliverables, in detail)
• What you'll be paid, when, and in what currency
• Payment terms (e.g. 14 days net) and consequences of late payment
• Who owns the IP that comes out of the work
• How either party can end the contract
• Confidentiality obligations
• Liability limits (you almost certainly want a cap)
• Which law applies and which courts (England & Wales, normally)

Late Payment of Commercial Debts Act

For B2B contracts only. If a customer pays late, you're automatically entitled (no court order needed) to:

• Interest at Bank of England base rate + 8% on the overdue amount (currently ~12.5%)
• A fixed compensation fee: £40 (debt under £1,000), £70 (£1,000–£10,000), £100 (over £10,000)
• Reasonable costs of recovery

Mention this in your invoice template (e.g. "Late payment is subject to interest under the Late Payment of Commercial Debts (Interest) Act 1998"). Most clients pay before things escalate once they see this.

If a customer still won't pay

1. Send a polite reminder, then a 7-day formal letter before action.
2. Use the Money Claim Online service at gov.uk/make-money-claim. Fees start at £35 for claims under £300.
3. For debts of £100–£10,000: this is the "small claims track" — lawyer-free, designed for businesses and individuals.
4. For larger or complex debts: a no-win-no-fee debt recovery firm, or solicitor.

16. Consumer rights you must respect.

If you sell to the public (not just other businesses) the Consumer Rights Act 2015 gives your customers rights you cannot contract away.

Goods you sell must be

• Of satisfactory quality — not faulty when delivered, lasting a reasonable time
• Fit for purpose — including any specific purpose the customer told you about
• As described — matching photos, marketing claims, model details

Customer remedies if goods are faulty

• 0–30 days from delivery: full refund (short-term right to reject)
• 30 days – 6 months: repair or replacement (you choose), or refund if that fails
• 6 months – 6 years: customer must prove the fault was there from delivery; if proved, repair/replacement or partial refund

If you sell online or by phone (distance selling)

Customers have a 14-day cooling-off period from delivery — they can cancel for any reason and get a full refund (including standard outbound delivery). Tell them about this right or the cancellation window extends to 12 months. Exceptions: bespoke items, perishables, downloads they've started using.

Services you provide must be

• Performed with reasonable care and skill
• For a reasonable price, if no price was agreed up front
• Within a reasonable time, if no time was agreed

If you fall short, customers can ask for the service to be redone or for a price reduction.

Reviews, prices and ads

• Fake reviews are illegal from April 2025 under the Digital Markets, Competition and Consumers Act 2024. Don't post fake reviews, don't pay for them, don't hide negative ones.
• Drip pricing (showing a low price then adding mandatory fees at checkout) is banned for unavoidable charges.
• Subscription traps — clear pre-contract info and clear cancellation must be provided.

17. Working from home — what to check.

Working from home is fine for most micro-businesses but four people may need to know.

Your mortgage lender

If you have a residential mortgage, technically you should tell the lender. In practice, low-impact home working (laptop, no customers visiting) is almost never an issue. If you'll convert a room (e.g. a treatment room) or have regular customers visiting, the lender's permission is sensible.

Your landlord (if renting)

Most tenancy agreements say "private residential use only". Get written permission to run a business from the property. A polite request stating "I'll be working from home as a freelance designer, no clients visiting, no signage" is usually fine.

Your council (planning)

You only need planning permission if the business changes the character of the property — e.g. you're operating from a garage you've converted, you have constant visitors, you make noise affecting neighbours, you put up signage, or significantly increase traffic. Most home offices need nothing.

Your home insurance

Standard home insurance covers personal use only. If you have business equipment over a low threshold (£5,000 in many policies), or if customers visit, you need to declare business use. Failure to do so can void claims.

Council tax vs business rates

If you only use part of a room incidentally for work, you stay on council tax only. If you dedicate a room entirely to business use, the Valuation Office may treat that room as a separate "rateable" unit. Small business rate relief usually means you pay nothing — but you must apply.

Use-of-home tax expense

You can claim a use-of-home cost as an expense. Either:

• Flat rate (simplified expenses): £10/month (25–50 hours), £18/month (51–100 hours), £26/month (101+ hours per month worked at home). No need to keep utility bills.
• Actual cost: proportion of utilities, council tax, rent/mortgage interest, broadband. More accurate but much more record-keeping.

18. Business rates & small business rate relief.

If you rent or own non-residential premises, you pay business rates instead of council tax. Most small businesses pay nothing — but you must apply for the relief.

Small Business Rate Relief (England)

• If your premises has a rateable value of £12,000 or less: you pay nothing.
• Between £12,001 and £15,000: relief tapers from 100% to 0%.
• If you have only one property with rateable value under £15,000, you qualify automatically once you apply.
• Apply via your local council. Many councils don't auto-apply — ask.

Find your property's rateable value at gov.uk/correct-your-business-rates. Scotland, Wales, NI have their own equivalent schemes (often more generous).

19. Importing & exporting.

Brexit changed almost everything about UK-EU trade. The basics:

You'll need an EORI number

Free from HMRC at gov.uk/eori. Required for any commercial movement of goods in or out of the UK. Takes ~1 week.

Customs declarations

• Required for almost all UK↔EU and rest-of-world movements.
• Most small businesses use a customs agent or courier (DHL, FedEx, UPS) to handle this. Typical cost: £25–£60 per shipment.
• Get the commodity (HS) code right — mistakes cause delays and tax bills.

VAT & duties

• Importing into the UK: UK VAT is due at the border (or via Postponed VAT Accounting if you're VAT-registered). Duty depends on the commodity code.
• Exporting: zero-rated for UK VAT, but the destination country's VAT/duty applies on arrival — the customer usually pays.
• EU sales of digital services to consumers: you may need to register for the EU's "Non-Union OSS" scheme.

Free help

The Department for Business and Trade offers free advisers for first-time exporters. Local Growth Hubs and Chambers of Commerce also run free workshops.

20. The annual filings calendar.

Pin this somewhere visible. Missing any of these triggers automatic penalties.

Sole trader / partnership (UK tax year 6 April → 5 April)

• 31 July — second payment on account for previous year
• 5 October — deadline to tell HMRC you became self-employed in the tax year that just ended
• 31 October — paper Self Assessment deadline (most file online)
• 31 January — online Self Assessment + balancing payment + first payment on account
• From April 2026 — quarterly MTD updates if income exceeds £50,000

Limited company (your accounting year is your own choice)

• 9 months after year-end — statutory accounts due at Companies House
• 9 months and 1 day after year-end — Corporation Tax payment due to HMRC
• 12 months after year-end — CT600 Corporation Tax return due to HMRC
• Every 12 months from incorporation date — confirmation statement at Companies House (£34)

If VAT registered

• Quarterly VAT return due 1 month and 7 days after the VAT period ends
• Payment due the same date (or 3 working days later if paying by direct debit)

If you employ people

• FPS (Full Payment Submission) every payday
• EPS (Employer Payment Summary) monthly if claiming reductions
• 5 July — deadline to give employees their P60 for previous tax year
• 6 July — expenses and benefits returns (P11D/P11D(b)) due to HMRC
• 22 July — payment of Class 1A NI on benefits due

21. Free UK support & grants.

Genuine free help exists. Most people miss it because the system is fragmented across central government, councils, devolved governments, and charities.

22. Funding — loans, equity, tax credits.

Most UK businesses are bootstrapped (funded from sales and personal savings). For those that need outside money, here are the realistic options — and the tax incentives that exist whether you raise money or not.

Debt finance

• Start Up Loans — £500–£25,000 fixed 6%, government-backed, no personal guarantee. Open to anyone starting a business in their first 36 months of trading.
• Bank business loans — usually want 2+ years of accounts and a personal guarantee on amounts over £25k.
• Funding Circle / iwoca / Capify — peer-to-peer and fintech lenders. Faster than banks. Rates higher (8–20%).
• Asset finance — lease or hire-purchase for vehicles and equipment. Often cheapest way to fund kit.

Equity finance

• Angel investors — typically £25,000–£500,000 for a stake in your business. UK Business Angels Association lists registered groups.
• SEIS / EIS — very valuable tax reliefs for your angel investors (up to 50% income tax relief). Get pre-approval from HMRC before raising. Apply at gov.uk/seis.
• Crowdfunding — equity (Seedrs, Crowdcube) or rewards-based (Kickstarter, Indiegogo). Equity rounds typically £150k+.
• Venture capital — for high-growth tech businesses raising £500k+. Most UK businesses do not need this and most would not get it.

R&D Tax Credits (very valuable, often missed)

If your company spent money trying to "resolve scientific or technological uncertainty" — software development, new product engineering, novel manufacturing processes, even some food science — you can get a Corporation Tax reduction or cash credit. Applies to most genuine tech startups.

• Apply via your CT600 with a supporting technical report.
• SMEs (under 500 employees and £100m turnover) can claim a more generous rate.
• Loss-making companies can receive a cash credit instead of tax relief.
• HMRC has become much stricter — use a reputable specialist firm, never a cold-caller promising guaranteed results.

Other tax-efficient schemes

• Annual Investment Allowance: 100% first-year deduction for plant and machinery purchases up to £1 million.
• Full expensing for Ltd companies on qualifying new plant & machinery.
• Employment Allowance: reduces your Class 1 NI bill by up to £10,500/year (most small employers qualify).
• Patent Box: 10% Corporation Tax rate on profits from patented inventions.

23. Scams that target new businesses.

Every UK business gets these in their first year. None are real. None require any payment.

If unsure whether a letter or call is legitimate, run the company through Sorted's Check this firm tool — if they're not on Companies House or the FCA Register, that tells you a lot. Report scams to Action Fraud.

24. Your first year, month by month.

Do these things at roughly these moments and you stay out of trouble.

25. Closing or selling a business properly.

Closing a UK business is straightforward if it has no debts. With debts, it gets serious. Either way, the steps must happen in the right order.

Sole trader stopping trading

• Tell HMRC at gov.uk/stop-being-self-employed
• File a final Self Assessment for the part-year of trading
• Pay any final tax + Class 4 NI
• Cancel VAT registration if registered
• Keep records for 5 years after the final filing

Closing a solvent Ltd company

• Stop trading and pay all bills
• Distribute remaining assets to shareholders (often tax-efficiently via a Members' Voluntary Liquidation if over £25,000)
• For smaller balances: apply to strike off the company via Companies House (form DS01, £33). Takes ~2 months.
• Notify HMRC, file final accounts and CT600, pay final Corporation Tax
• Cancel PAYE and VAT registrations

If your company has debts it can't pay

• Do not just try to strike it off — creditors can object and you'll face personal action.
• Talk to a licensed insolvency practitioner immediately. Many offer free first consultations.
• Options include Creditors' Voluntary Liquidation (CVL) or, in some cases, Company Voluntary Arrangement (CVA).
• Free help: Business Debtline 0800 197 6026 — charity, independent, no upsell.

Selling the business

• Asset sale (sell the business assets to a buyer) vs share sale (sell your Ltd company shares).
• Tax: Business Asset Disposal Relief (formerly Entrepreneurs' Relief) gives a 10% CGT rate on the first £1 million of qualifying gains over your lifetime.
• Use a solicitor and an accountant. A business sale gone wrong is permanently expensive.

Common mistakes — the post-mortem

• Not saving for tax: the most common reason small businesses fail.
• Mixing business and personal money: causes tax trouble and emotional trouble.
• Not having a written contract: makes payment disputes expensive.
• Working without Employers' Liability cover: fine of £2,500 per day uninsured.
• Ignoring HMRC letters: penalties grow weekly. Open everything. Read everything.
• Paying fake invoices to fake "registries": always cross-check on Companies House first.