Summary
New UK businesses — whether limited companies or sole traders — face a sequence of mandatory registrations and filing deadlines. Miss the 3-month corporation tax notification window or the £90,000 VAT threshold and you face automatic penalties. This checklist covers everything you need to do, and when.
Step 1: Companies House Registration
If you are forming a limited company, your first step is registration at Companies House. This takes 24–48 hours online at a cost of £50 (paper applications cost £71 and take longer). You will need:
- →Company name (checked for conflicts on the Companies House name availability checker)
- →Registered office address (must be in England, Wales, Scotland, or Northern Ireland — a virtual address is acceptable)
- →Director details (name, DOB, correspondence address)
- →Shareholder details and share structure (number of shares, share class)
- →Standard Industrial Classification (SIC) code — choose the most accurate for your primary activity
- →Articles of Association (you can adopt the model articles)
Your registered office address is public record — do not use your home address unless you are comfortable with this. A professional registered office service is available from around £50 per year.
Step 2: Register for Corporation Tax
You must notify HMRC that your company has started trading within 3 months of the date trading commenced. "Trading" means any commercial activity — taking your first payment, signing your first contract, or purchasing goods for resale.
| Deadline | Action | Penalty for missing |
|---|---|---|
| Within 3 months of trading start | Notify HMRC (CT41G form / online registration) | £500 fixed penalty |
| 9 months and 1 day after period end | Pay corporation tax due | Interest from due date |
| 12 months after period end | File CT600 (corporation tax return) | £100 immediately; rises at 3 and 6 months |
Corporation tax for small companies is 19% on profits up to £50,000, rising to 25% for profits above £250,000. A tapered marginal rate applies between these thresholds.
Step 3: Set Up PAYE (If Paying Salaries)
If you plan to pay yourself or anyone else a salary, you must register as an employer with HMRC before your first payday. You cannot run payroll without a PAYE scheme reference. Allow at least one week for HMRC to issue the reference.
Most owner-directors of limited companies pay a low salary (up to the NI Secondary threshold — £5,000 for 2025/26, or up to the Personal Allowance if there are no other employees) and supplement income with dividends. This reduces National Insurance Contributions while staying within personal allowance. Your specific optimal salary level depends on whether you have other income and whether your company has other employees (which affects employer NI allowances).
You must submit Real Time Information (RTI) payroll submissions to HMRC on or before each payday. Annual Employer P60s must be issued to employees by 31 May following the tax year end.
Step 4: VAT Registration
VAT registration becomes mandatory when your rolling 12-month taxable turnover exceeds £90,000 (the threshold from April 2024). You must register within 30 days of the end of the month in which you exceeded the threshold — and must account for VAT from the date you were required to be registered.
However, voluntary registration before the threshold can be beneficial if your customers are VAT-registered businesses (they can reclaim the VAT you charge, so your prices are not effectively higher to them) and you incur significant costs on which you can reclaim input VAT.
VAT schemes to consider for small businesses include: the Flat Rate Scheme (you pay a fixed percentage of gross turnover, keeping the difference), the Cash Accounting Scheme (you account for VAT when you are paid, not when you invoice), and the Annual Accounting Scheme (one VAT return per year with advance payments).
Step 5: Annual Filing Deadlines
Once trading, you have an annual cycle of filings across Companies House and HMRC:
Key Tax Planning Decisions in Year One
The decisions made in year one often have a disproportionate impact on your long-term tax efficiency. The most important:
Salary vs Dividends
Setting the optimal director salary — high enough to count as a qualifying year for State Pension purposes (£6,396 for 2025/26) but low enough to minimise NI, with profit extracted as dividends (taxed at 8.75%/33.75%/39.35% — no NIC applies to dividends).
Accounting Period
Your first accounting period can be up to 18 months. A strategic end date can align with your cash-flow peak, defer your first tax payment, or synchronise with VAT quarter ends to reduce admin.
Pension Contributions
Employer pension contributions are deductible against corporation tax. A company contribution reduces CT at 19–25% — far more efficient than a personal contribution from after-tax income.
Pre-Trading Expenses
Expenses incurred before the company started trading — software subscriptions, professional fees, equipment — may be deductible against the first trading period's profits if correctly captured.
Share Structure
Getting the share structure right from the outset — including class of shares and who holds them — determines how flexibly dividends can be distributed and whether a family income-splitting strategy is available.
Most of these decisions are far harder to revisit after the fact than to get right from the start. Book a startup consultation before you begin trading — an hour with us can save you thousands in the first year alone.