Find the money you can keep
Business tax: keep more of every pound of profit
What it costs to set up, when tax kicks in, and the costs you can deduct to cut your bill.
Setting up: fees
- Registering a limited company online with Companies House costs £100 (from May 2024).
- The yearly confirmation statement costs £50 online.
- Registering as a sole trader for Self Assessment with HMRC is free.
Tax thresholds to know
- Trading allowance: the first £1,000 of side income is tax free.
- Personal allowance: £12,570 before income tax.
- VAT registration is required once turnover passes £90,000 in a rolling 12 months.
- Corporation tax: 19% on profits up to £50,000, 25% above £250,000, with marginal relief in between.
- Making Tax Digital for Income Tax starts April 2026 for sole traders and landlords with income over £50,000.
Deductions that save you money
- Stock, materials and costs of goods you sell.
- Office costs, phone, software and a share of home running costs (or the flat rate for working from home).
- Business mileage at 45p a mile for the first 10,000 miles.
- Equipment through the Annual Investment Allowance, up to £1 million a year.
- Pension contributions paid by your company.
- Accountant fees, insurance and professional subscriptions.
Form your business, step by step
- 1
- 2
Prepare documents
You need a registered office address, at least one director, shareholder details, a SIC code and articles of association (model articles are fine).
Official page - 3
Register online (form IN01 equivalent)
Register with Companies House online for £100. Paper form IN01 costs more and is slower.
Official page - 4
Register for tax
Register for corporation tax within 3 months of starting to trade, and PAYE if you pay salaries.
Official page - 5
Sole trader instead
Register for Self Assessment by 5 October after your first tax year. It is free.
Official page
Check it on the official sites
Fees and thresholds change, usually each tax year. General information, not personal advice.
Ready to start? Open the 10 step business launchpad.
