When  you set up a new business you have to decide whether to be a sole trader or a limited company.   There are serious tax implicatons for a sole trader if his business really takes off and he starts bringing home more of the bacon than he first envisaged.  Suppose you start earning over £100K as a sole trader, you would be advised to set up a limited company because once you start earning over that threshold your personal allowance starts to reduce, and for any earnings after £125,140, it is reduced to £0.  As opposed to the corporation tax rate of 25%.  Some tax  accountants would advise to register as a limited company at a much lower profit at say a third of the threshold, between £39K & £40K.

However before you get to that heady state, being a sole trder is by far the simplest way to start up and run a business,  you don’t pay any registration fees but you must by law register as self employed.    If going donw he sole-trader route you must register as such within three months of the month that you started up and separately, you will have to register for VAT if  your taxable turnoer is £90K or more.  If it does get to that point, paying for an accountant specialising in small businesses will generally be well worth evry penny paid to them.