Setting up a limited company in the UK is straightforward — but getting the structure right from the start will save you time, money and headaches later. This step-by-step guide walks you through the entire process.
Step 1 — Choose your company name
Your company name must be unique and not the same as or too similar to an existing registered name. You can check availability on the Companies House register at companieshouse.gov.uk. The name must end in "Limited" or "Ltd". You can reserve a name before incorporating if you need more time.
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Step 2 — Decide on your company structure
Before registering, you need to decide:
- Directors — who will manage the company (you can be the sole director)
- Shareholders — who owns the shares (you can be the sole shareholder)
- Share structure — how many shares and at what value (most small companies start with 100 shares at £1 each)
- Registered office address — must be a UK address. This will be publicly visible at Companies House.
Step 3 — Register with Companies House
You can register online at companieshouse.gov.uk for £50 (same-day service) or £13 for standard registration (usually processed within 24 hours). You'll need to complete form IN01 with details of your company name, registered address, directors, shareholders and share structure. Once approved, you'll receive a Certificate of Incorporation — this is your company's birth certificate.
Step 4 — Register with HMRC for Corporation Tax
Within 3 months of starting to trade, you must register your company with HMRC for Corporation Tax. You'll receive a Unique Taxpayer Reference (UTR) and a notice to file. Corporation Tax is due 9 months and 1 day after your company's year-end, and your tax return must be filed within 12 months of year-end.
Step 5 — Set up PAYE (if paying yourself a salary)
If you intend to pay yourself or any employees a salary, you must register as an employer with HMRC and set up a PAYE scheme. This can be done online via HMRC's website. You'll then need payroll software to calculate and report salaries, tax and National Insurance to HMRC in real time (Real Time Information — RTI).
Step 6 — Open a business bank account
A limited company is a separate legal entity, so it must have its own bank account. Company finances must be kept completely separate from your personal finances. Many business accounts can be opened online in 24–48 hours.
Step 7 — Consider VAT registration
If your taxable turnover exceeds £90,000, you must register for VAT. Below this threshold, registration is voluntary — but it may be beneficial if your customers are VAT-registered businesses and you have significant VAT costs to reclaim.
Step 8 — Set up your accounting system
Use cloud accounting software (Xero, FreeAgent or QuickBooks) from day one. This keeps your records organised, ensures MTD compliance and makes your accountant's job (and your tax bill) smaller.
Annual ongoing obligations
Once your company is running, you must:
- File annual accounts with Companies House (within 9 months of year-end)
- File a Corporation Tax return with HMRC (within 12 months of year-end)
- File a Confirmation Statement with Companies House (annually)
- Submit RTI payroll reports to HMRC each pay period
- File quarterly VAT returns (if VAT-registered)
How Fernside Accounting can help
We handle the entire company formation process and provide ongoing accounting, payroll and tax compliance for limited companies across Woodford Green, Chigwell, Loughton, South Woodford, Snaresbrook, Gants Hill, Chingford, Epping, City of London, Wanstead. Book a free 20-min call and we'll guide you through every step.