United Kingdom (GB)
The United Kingdom — comprising England, Scotland, Wales, and Northern Ireland — is a constitutional monarchy and parliamentary democracy of 68 million people, and one of the world's leading economies, cultural powerhouses, and global cities.
Capital: London
Region: Europe
Language: English
Currency: GBP (£)
Cost of living: Expensive (index 78)
Emergency: 999
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Business Setup
Start a business or go freelance in United Kingdom.
🧑💻 Freelancer / Self-Employed Guide
Steps to register:
- 1 Register as Self-Employed with HMRC by 5 October after the tax year you first started trading (gov.uk/log-in-file-self-assessment-tax-return/register-if-youre-self-employed).
- 2 Apply for a National Insurance number (NINo) from HMRC if you do not already have one — essential for tax and benefits.
- 3 Set up a separate business bank account (not legally required for sole traders but strongly recommended for record-keeping).
- 4 Keep records of all income and expenses — receipts, invoices, bank statements.
- 5 Register for VAT (Value Added Tax) if your annual taxable turnover exceeds the VAT threshold (£90,000 for 2025/26). You can voluntarily register below this threshold — sometimes advantageous.
- 6 File your Self Assessment tax return annually — deadline 31 January online for the previous tax year (6 April to 5 April).
- 7 Pay your tax bill: 31 January (balancing payment plus first payment on account) and 31 July (second payment on account).
- 8 Consider whether to incorporate as a Limited Company as income grows — typically advantageous above approximately £30,000–40,000 net profit.
Tax registration
Register for Self Assessment with HMRC at gov.uk. You will be given a UTR (Unique Taxpayer Reference — a 10-digit number) by post within 2–4 weeks. The UTR is needed for all tax filings and correspondence with HMRC. Keep it secure. National Insurance: Class 2 NI (abolished from April 2024) and Class 4 NI (9% on profits £12,570–£50,270; 2% above) are collected via Self Assessment.
VAT threshold
£90,000 annual taxable turnover (2025/26). Register at gov.uk/register-for-vat. Standard rate 20%. VAT returns typically quarterly via Making Tax Digital (MTD) compatible software. Flat Rate Scheme available for simpler calculation (fixed % of VAT-inclusive turnover).
Invoicing
Invoices must include: your name and address, client name and address, invoice number (sequential), date of supply, description of goods/services, amount (exc. VAT and inc. VAT if registered), your VAT number (if VAT registered). VAT invoices must be issued within 30 days of supply. Keep copies for at least 6 years.
Social security
Self-employed persons contribute Class 4 NI via Self Assessment (9%/2%). Class 2 NI was abolished from April 2024 — previously provided entitlement to State Pension and certain benefits. Class 4 NI does NOT provide entitlement to contribution-based benefits. To maintain State Pension entitlement, you need National Insurance credits or voluntary Class 3 contributions (£17.45/week, 2025/26). If you transition from employed to self-employed, check your NI record at gov.uk/check-national-insurance-record.
💡 IR35 (off-payroll working rules): if you provide services through a limited company to a client who controls your work in the same way as an employee, HMRC may argue you are "inside IR35" and should be taxed as an employee. This is a major issue for contractors in the UK. Medium and large businesses must assess IR35 status. Get professional advice if you work as a contractor. Making Tax Digital (MTD): HMRC is mandating digital record-keeping and quarterly updates for self-employed individuals with income above £50,000 from April 2026, and above £30,000 from April 2027. Use MTD-compatible software (QuickBooks, Xero, FreeAgent) from the start.
🏢 Business Structures
Sole Trader · Sole Trader
Sole Trader / Self-Employed
None
Min. capital
1–2 days (register online)
Setup time
Liability: Unlimited — personal assets at risk
Setup cost: Free (register with HMRC for Self Assessment)
Best for: Freelancers, consultants, tradespeople, small service businesses. Simplest structure. Many expats start here. Income taxed as personal income via Self Assessment.
Ltd · Private Limited Company
Private Limited Company (LLC equivalent)
£1 minimum share capital (in practice £1 is sufficient)
Min. capital
24 hours online (same-day paper application possible)
Setup time
Liability: Limited — shareholders' liability limited to share capital
Setup cost: £50 (Companies House online registration) + accountant fees typically £300–1,500/year
Best for: Contractors, growing businesses, those wanting tax efficiency (salary + dividends structure), professionals working via Personal Service Companies (PSCs). IR35 rules apply for disguised employment. Most common structure for contractor/freelancers earning above £30,000/year.
PLC · Public Limited Company
Public Limited Company (stock exchange eligible)
£50,000 minimum share capital (25% must be paid up)
Min. capital
Weeks to months with legal/accounting requirements
Setup time
Liability: Limited
Setup cost: £500 (Companies House) + significant professional fees for listing
Best for: Large companies seeking to list shares on the stock exchange (LSE, AIM). Not relevant for most expat business needs.
LLP · Limited Liability Partnership
Limited Liability Partnership
None
Min. capital
24 hours online
Setup time
Liability: Limited for partners (unlike a general partnership)
Setup cost: £40 (Companies House online) + legal/accountant fees
Best for: Professional firms (solicitors, accountants, architects), where partners want some liability protection while retaining partnership tax treatment. Must have at least 2 designated members.
Partnership · General Partnership
Partnership
None
Min. capital
Immediate (register each partner for Self Assessment separately)
Setup time
Liability: Unlimited joint liability
Setup cost: Free (but a partnership agreement from a solicitor is strongly recommended)
Best for: Two or more people running a business together where a simple structure is needed. Less common than Ltd for most purposes. Each partner personally liable for all partnership debts.
CIC · Community Interest Company
Social Enterprise / Community Interest Company
None (Ltd variant: £1 shares)
Min. capital
3–5 working days for CIC regulator approval
Setup time
Liability: Limited
Setup cost: £27 (Companies House) + CIC regulator fee
Best for: Social enterprises, community organisations, and businesses with a primary social purpose. Asset lock prevents profit from being distributed to shareholders in the usual way.
Business Setup
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