Are you considering starting a new business in the U.K. with your ideas or invention? If you have created a strategic plan or have a set of ideas that can make you money, it is a good plan to register or incorporate your business as soon as possible. If you want to register your business in the United Kingdom as a sole trader you are not liable to pay corporation taxes. A sole trader is a business that is ran by one person on a self employed basis. It is different to operating a limited company, which in effect is a separate legal entity to the founders.

If you are a self employed person without employees and a start-up business or new business, operating as a sole trader is often the best option for your enterprise. If you have partners, then you should register your business with HMRC as a traditional partnership or Limited Liability Partnership. These businesses are not obligated to pay Corporation Tax.  Each partner or sole trader is personally liable for income tax and must register as self employed with HMRC.

Businesses with No Corporation Tax Liability

  • Sole Trader
  • Traditional Partnerships
  • LLP (Limited Liability Partnerships)

Where to Register a Business?

If you are a sole trader and conducting business you must register with HMRC to inform them of your tax liability. To learn more about registering and tax liabilities of a business or company, visit HMRC online. You can learn all about how to start a new company if you choose to incorporate your business. If you are conducting business as a sole trader, traditional partnerships, or LLP you may learn about tax registration.

Whether you decide to incorporate or register your business or company, if the business is dormant there are no tax liabilities. Start up businesses that have been incorporated or registered are not liable to pay taxes if the business isn’t generating revenue or income.

Incorporating a Company

There are some nominal fees associated with incorporating a company in the United Kingdom and also a number of administrative obligations you will need give thought to. When you incorporate your company it becomes a separate legal entity independent of its directors. Applicants may choose to incorporate as a private company limited by shares; private company limited by guarantee; private unlimited company; or as a public limited company.

A company can be incorporated by electronic filing or using the Web Incorporation Service online. The option to incorporate can be processed by filling out your forms through paper filing and mailing to Companies House.

If you need help with incorporating your company seek guidance from a business lawyer in the U.K. Business lawyers are very helpful with complex incorporation and registration processes, and you might also wish to consult an accountant before attempting to incorporate your business as a limited company off your own back.