Getting Started in 2026
Starting a new business is an exciting step. Getting your structure, registrations, and tax affairs right from day one will save you significant time, money, and stress down the line. This guide covers the essentials for new UK businesses in 2026.
Step 1: Choose Your Business Structure
Sole Trader
The simplest structure — you register as self-employed with HMRC and pay Income Tax and NIC on your profits via Self Assessment. Straightforward to set up with minimal administration, but you have unlimited personal liability.
Limited Company
A separate legal entity which limits your personal liability. Often more tax-efficient once profits exceed around £30,000–£40,000 per year, as you can take a combination of salary and dividends. Requires Companies House registration and annual filing obligations.
Partnership
Two or more people sharing profits and liabilities. A Limited Liability Partnership (LLP) provides protection similar to a limited company.
Step 2: Register Your Business
Sole Trader
- Register for Self Assessment with HMRC (by 5 October after the end of your first tax year of trading)
- Keep records of all income and expenses
Limited Company
- Incorporate at Companies House (can be done online for £50)
- Register for Corporation Tax with HMRC within 3 months of starting to trade
- Set up a business bank account
- Appoint directors and issue shares
Step 3: Register for VAT
You must register for VAT if your taxable turnover in any rolling 12-month period exceeds £90,000. You can also register voluntarily below this threshold, which may allow you to reclaim VAT on business expenses.
Important for 2026: Making Tax Digital for VAT is already mandatory for all VAT-registered businesses. Ensure you are using compatible software.
Step 4: Set Up PAYE (If Taking On Employees)
If you employ staff, you must register as an employer with HMRC and operate PAYE (Pay As You Earn). Key obligations include:
- Deducting Income Tax and employee NICs from wages
- Paying employer NICs (now at 15% from April 2025)
- Enrolling eligible employees into a workplace pension (auto-enrolment)
- Submitting Real Time Information (RTI) payroll data to HMRC each pay period
Step 5: Prepare for Making Tax Digital
From April 2026, MTD for Income Tax Self Assessment is mandatory for self-employed individuals and landlords with income over £50,000. If this applies to you, you will need compatible accounting software and will submit quarterly updates to HMRC instead of a single annual return.
Even if you are below the threshold now, using digital accounting software from the start is strongly recommended.
Key Tax Dates for New Businesses
- 31 January — Self Assessment return and payment deadline
- 31 July — Payment on account deadline (if applicable)
- 9 months after year end — Corporation Tax payment due
- 12 months after year end — Company Tax Return (CT600) filing deadline
How Ascot Accountancy Can Help
We work with new businesses every day — from choosing the right structure and completing your registrations, to ongoing bookkeeping, payroll, and tax compliance. Book a free initial consultation to discuss your new business with our team.