Business or self-employment?
Consider whether to operate as a sole trader or limited company. Responsibilities, tax and reporting differ; seek accounting advice where appropriate.
For founders, freelancers and people starting out
Start-ups & Self-Employment
Learn the financial basics of starting a small business in the UK: separating personal and business money, planning cash flow, allowing for tax and protecting household stability.
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Set up a sound foundation
Separate your finances
Keep clear business records and consider a dedicated business bank account. Limited companies have distinct banking and accounting needs.
Calculate start-up costs
List equipment, software, insurance, licences, marketing, stock and working capital before committing funds.
Manage cash flow and obligations
Plan for irregular income
Forecast expected receipts, fixed costs, variable costs and late payments. Maintain a household buffer where possible.
Allow for tax
Understand Self Assessment, National Insurance and when VAT registration may be required. Check current HMRC thresholds and deadlines.
Pricing and profit
Include time, materials, overheads, taxes and contingency in pricing. Revenue is not the same as profit or take-home pay.
Build a resilient business
Protect yourself
Check whether public liability, professional indemnity, employers’ liability or other cover is appropriate or required.
Pension and personal safety net
Self-employed people may not receive employer pension contributions or sick pay. Plan for savings and periods when you cannot work.
Where to get help
Use GOV.UK, HMRC and local business support services for current requirements, and consult qualified accountants or advisers as needed.
Your practical first steps
- Estimate one-off start-up costs and six months of running costs.
- Create separate household and business cash-flow forecasts.
- Check your HMRC registration, record-keeping and tax responsibilities.
- Review insurance, contracts and payment terms.
- Set aside money for tax and unexpected expenses.
UK information: Rules and eligibility can change. This content is educational and is not personal financial, tax or legal advice.
Resources for this pathway
Useful guides and checklists
Start-up cash flow: a beginner’s guide
Practical steps, questions and a checklist.
Read guide →Trusted UK financial and care support
Practical steps, questions and a checklist.
Read guide →Learn more
More practical guides and resources
Choosing a business structure
Read guide →Pricing and break-even basics
Read guide →Tax records for the self-employed
Read guide →Managing irregular self-employed income
Read guide →Business insurance and protection
Read guide →Learn financial planning for your situation
Free educational lessons with practical exercises, explanations of risks and signposts for professional support.
A start-up financial plan: cash before profit
Learn how profit, cash flow and personal living costs interact.
Read lesson →Understanding tax reserves and record keeping
Build an organised system for business records and future tax bills.
Read lesson →Start-up funding: understanding the trade-offs
Learn the differences between funding sources before committing.
Read lesson →