Business Startup Compliance Checklist

Starting a business means taking on a set of legal and compliance obligations, and several of them have deadlines that begin running from the day you start trading rather than from the day you get round to them. Choosing a structure, registering with HMRC, setting up records, sorting insurance and handling customer data properly are all straightforward individually — the problems come from doing them late. Use this checklist to cover the essentials in the right order before you trade.

Decide the structure first

Everything else follows from whether you trade as a sole trader or through a limited company. That choice determines how you register, how you are taxed, whether your personal assets are exposed, and how much of your information sits on a public register. Changing later is possible but means moving contracts, bank accounts, insurance and licences across, so it is worth a proper think at the start rather than defaulting to whichever sounds more impressive.

  • Before trading: choose the structure, register with HMRC or Companies House, open a business bank account, and arrange the insurance your work requires.
  • From day one: keep records of every sale and expense. Reconstructing a year from a mixed personal account is where most small businesses lose money and miss deadlines.
  • Within the first months: check whether you need a licence, whether data protection registration applies, and keep an eye on your rolling turnover against the VAT threshold.

Missing a registration deadline has consequences that are out of proportion to the effort involved. Late registration for Self Assessment, late VAT registration and late Companies House filings all attract automatic penalties regardless of whether you made a profit.

Set money aside for tax as it accrues, in a separate account. Tax you have collected or will owe was never your money to spend.

Registration and legal structure

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Insurance and compliance

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Financial record-keeping

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Helpful organisations

HM Revenue & Customs

Government

Responsible for collecting taxes, paying some forms of state support, and administering national insurance.

Visit website0300 200 3300

Companies House

Government

Incorporates and dissolves limited companies, registers company information, and makes it available to the public.

Visit website0303 123 4500

Information Commissioner's Office

Regulator

The UK's independent authority for data protection and information rights, enforcing the UK GDPR and Data Protection Act 2018.

Visit website0303 123 1113

Frequently asked questions

When exactly do I need to register with HMRC?
As a sole trader you must register for Self Assessment by the October following the end of the tax year in which you started trading, though registering sooner is simpler and avoids forgetting. A limited company registers with Companies House at incorporation and then with HMRC for Corporation Tax shortly after it starts trading. Register as soon as you are confident you are running a business rather than an occasional hobby, since the deadlines carry penalties.
Do I need to register with the data protection regulator?
Most businesses processing personal data for commercial purposes must pay a data protection fee to the Information Commissioner's Office, with some exemptions for very limited processing. If you keep customer records, run a mailing list, use CCTV or handle staff data, assume it applies and check the online self-assessment tool. The fee is modest; not registering when required can lead to a penalty, and it is one of the easiest obligations to overlook entirely.
What insurance do I actually need?
Employers' liability insurance is a legal requirement as soon as you have staff, with a daily penalty for going without. Public liability is not compulsory but is expected by most commercial clients and venues, and professional indemnity is standard for advisory work. Some trades and professions have specific requirements set by their regulator or licensing authority. Check what your contracts oblige you to hold before you sign them, because clients frequently specify minimum cover levels.
When do I have to register for VAT?
When your taxable turnover over any rolling twelve-month period passes the registration threshold, or when you expect to pass it within the next thirty days alone. The rolling test catches people out because it is not tied to your accounting year. Registering late means owing VAT on sales where you never charged it, plus a possible penalty. You can also register voluntarily below the threshold, which helps if your customers are VAT-registered businesses and hurts if they are consumers.

Related guides

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Disclaimer

This information is for general guidance only and does not constitute legal, financial, or professional advice. Always check official sources and seek qualified help where needed.