Business Structures
| Structure | Setup cost | Best for |
|---|---|---|
| Sole Trader | Free | Freelance / small |
| Limited Company (Ltd) | £12 | Most businesses |
| Partnership | Free | 2+ people sharing equally |
| LLP (Limited Liability Partnership) | £40 | Professional services |
Limited Company Registration
- Where: gov.uk/limited-company-formation
- Cost: £12 online (£40 paper)
- Time: 24 hours typical
- Need: Company name, registered office, director(s), shareholder(s), Memorandum + Articles
- Annual cost: £12 confirmation statement + accountancy (£600-1,500)
- Use a formation agent (£20-100) for guidance
Sole Trader
- Cost: Free
- How: Register with HMRC for Self Assessment
- Tax: All profits taxed as personal income (20%/40%/45%)
- NI Class 2: £3.45/week (above £6,725 profit)
- NI Class 4: 6% on £12,570-£50,270 profits
- Best for: freelancers, side businesses, non-VAT-threshold
Foreigner Routes
- Innovator Founder visa — endorsed innovative business + £1,191 visa fee, 3 years
- Skilled Worker self-sponsorship — your own UK company sponsors you (highly regulated)
- Global Talent visa — endorsed exceptional talent route
- Setting up while abroad — register a UK Ltd company without living in UK; common for non-residents
- Banking: Wise Business + UK address solution allows non-residents to operate
Tax Basics
- Corporation Tax: 19% (small) - 25% (large)
- VAT registration threshold: £90,000 turnover (2026), 20% standard rate
- Income Tax on dividends from your company: tax-free up to £500, then 8.75%/33.75%/39.35%
- National Insurance: separate from income tax
- Get an accountant: £600-1,500/year saves more than it costs
- Use FreeAgent or Xero for bookkeeping (£15-30/month)
💼 Quick start: Most foreign-owned UK Ltd companies register in 24 hours via 1st Formations or Rapid Formations (£20-50 packages incl. registered office). Open Wise Business account for instant GBP banking.