Do You Need to Register Your Business?
In partnership with Tide: Discover everything you need to know about registering a business, from how to register and when, to its impact on startup grant eligibility – and more.
If you’ve got an innovative idea and want to get it off the ground, you’ll first need to register your business. We’ll explore how to register your business and when you need to do it – especially if you want to qualify for grant funding.
Figuring out if you need to register your business can be a tricky task for any new owner. And the question isn’t just, ‘do I need to register?’, it’s also ‘with who, by when, and how?’.
If you’re confused about business registration, you’ve come to the right place. Keep reading to discover everything you need to know about registering a business.
In a word, yes. Whether you choose to become a self-employed sole trader or a director of your own limited company, you will need to register your business in some way.
The registration process varies depending on which of the two main business types you choose. Let’s begin with the option most people associate with registering a business.
To start a new limited company, you must register with Companies House before you begin trading. This registration is also known as forming or incorporating a company.
You’ll get a certificate of incorporation and you’ll become both a director and an employee of the new limited company, which means you’ll likely need to register for PAYE, too.
Any profit the company makes and any debt it incurs will belong to the business itself, not to you personally, and company profits will be subject to corporation tax.
To operate as a sole trader, you must register for self-assessment with HMRC. You must do this by the 5th October after the end of the tax year you started operating in.
You’ll be responsible for filing a self-assessment tax return, paying your own income tax and making your own national insurance contributions for each tax year.
The business’s earnings are your own personal income, which is subject to income tax. You will also be personally liable for any debt you incur in the running of your business.
If you want to trade as a limited company, you must register with Companies House and receive your certificate of incorporation before you start trading. The company cannot trade before it legally exists.
Any work you do before your company is incorporated will be classed as self-employment, and you may have to submit a self-assessment tax return and pay income tax and national insurance for it later on.
As a sole trader, you must register for self-assessment as soon as your income exceeds £1,000. You can earn up to this amount from self-employment each tax year without having to submit a tax return or pay income tax. This is known as your trading allowance.
Your operating structure might not be the only element of your business that you’re required to register. All food and drink businesses must register with their local authority, for example.
There are two types of business registration that you’re highly likely to encounter regardless of which sector your business operates in: VAT and PAYE.
VAT (Value-Added Tax) Registration
You must register for VAT if your taxable turnover for the last 12 months was more than £90,000 or if you expect it to exceed £90,000 within the next 30 days.
Once you’re VAT-registered, you’ll need to include VAT in the prices you charge to customers, keep records, and regularly report how much VAT you’ve collected and paid to other businesses. You then need to pay any VAT you owe to HMRC.
PAYE (Paye-As-You-Earn) Registration
If you’re an employer, you must register for PAYE so that HMRC can collect income tax and national insurance contributions from your employees.
You must register for PAYE if any company employee (including you, as a director) meets any of the following criteria for the current tax year:
- Is paid £123 or more a week
- Receives expenses and company benefits
- Gets a pension
- Has had another job
- Has received Jobseeker’s Allowance, Employment and Support Allowance, or Incapacity Benefit.
This rule applies even if you’re the only employee of your own limited company.
Yes. It’s not possible to start any type of business in the UK without registering it in some way with at least one official body, such as HMRC or Companies House.
This applies not just to sole traders and limited companies but to all UK business types, including but not limited to the following:
- Partnerships
- Limited liability partnerships (LLPs)
- Public limited companies (PLCs)
- Charities and community interest companies (CICs).
You can register a limited company with Companies House online at GOV.uk. It costs £50 and you should receive your certificate of incorporation within one business day.
Alternatively, an authorised Companies House agent can do it for you. For example, the business finance platform Tide will register your company for just £14.99 – and give you a free business bank account at the same time.
To complete your company registration, you’ll need to:
- Choose a company name
- Appoint at least one director (and provide personal details about them)
- List the company’s shareholders or guarantors
- Identify people with significant control over the company
- Prepare a memorandum of association and articles of association
If you need to register for self-assessment, you can do it online at GOV.UK. There’s no charge and you’ll receive your unique taxpayer reference within 10 business days (you’ll need this to file your tax return).
To register for self-assessment as a sole trader, you’ll need to confirm some basic details about your business plus your:
- National Insurance number
- Full name
- Address
- Date of birth
- Phone number
- Email address
Yes, in most cases, you need to register your business to be eligible for a grant. Registration is typically a key requirement to demonstrate that your business is legitimate and compliant with necessary regulatory requirements.
For instance, Innovate UK Smart Grants support disruptive and innovative projects across various sectors. Applicants must be UK-registered businesses; however, startups in the process of registering may still apply, provided registration is completed before funding is awarded.
The same goes for the European Innovation Council (EIC) Accelerator, a funding programme under Horizon Europe designed to support registered startups and small and medium-sized enterprises (SMEs) in developing and scaling up high-impact innovations.
One exception includes local or private grants for community projects that may not require formal registration, but this is less common. Likewise, if you’re a non-profit, your organisation might need to register with the Charity Commission, which also involves formal registration.
When registering a business in the UK, your choice of structure — sole trader, partnership, limited company, or charity — can affect your eligibility for grants.
- Sole traders in the UK have access to fewer grant options, as many schemes prefer entities with separate legal identities, such as limited companies.
- Partnerships must ensure they have a formal partnership agreement in place. Many grants require clear documentation of ownership shares and roles.
- Registering as a limited company with Companies House can open up a wider range of grants, as this structure is seen as more stable and credible by funding bodies.
If your business has a strong community focus, you might consider registering as a Community Interest Company (CIC) or a charity. These structures are eligible for grants specifically targeting social innovation or community impact.
Registration Considerations for Innovative Tech Companies in the UK
Tech startups in the UK face unique challenges and opportunities regarding business registration, which can affect grant applications.
For example, to qualify for Innovate UK funding or R&D tax credits, registering as a limited company is essential. Whereas, some grants require collaborative projects, such as with the EIC Pathfinder. So, it could be worth your while to formalise partnerships through joint venture agreements in some cases. Booking a consultation with a grant expert can help determine the best course of action for you.
Avoid these common errors when registering your business to improve your chances of securing grants:
- Inaccurate Companies House information: Ensure all details filed with Companies House are accurate and consistent, including your business name, SIC code, and directors’ information. Errors here can lead to grant rejections.
- Failure to update records: Keep your annual confirmation statement and accounts up to date with Companies House. Failure to comply can lead to penalties and disqualification from grants.
- Not registering as an employer: If your grant application involves funding for staff wages, you must register as an employer with HMRC.
Already Registered? Let’s Start Your Funding Journey Together
If you’re just starting out with a new business venture, step one is registering and step two is usually funding – especially if you’re in the development stage of a new tech innovation. Luckily, grants aren’t just for big businesses and there are plenty of funding opportunities for startups!
The Grantify team’s expertise paired with our groundbreaking AI platform streamlines the grant application process, leading to higher success rates in a fraction of the time. By 2028, our goal is to help tech businesses secure a total of $1 billion in funding to fuel innovation. Are you in?
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