How to start a UK limited company in 2026

The steps to set up a UK limited company in order, from choosing the shares and registering with Companies House to the tax registrations, a business bank account and accounting software.
By Buzz Accounting · Updated 13 July 2026

Three decisions to make before you incorporate

1. Should the business be a limited company? For most startups it should, particularly if you plan to take outside investment, bring in co-founders, make a meaningful profit or take on risk you do not want to carry personally. A company is a separate legal person, so the contracts, the debts and the tax bill belong to the company. If you are testing an idea on your own with a modest income, starting as a sole trader and incorporating later is cheaper and simpler. Sole Trader Accountants, another Buzz Accounting site, covers that route.

2. Who owns what? Agree how the shares are split between founders before you file anything with Companies House. Settle what each person is putting in, whether founders earn their shares over time (vesting), and what happens to a founder's shares if they leave in the first year. With a 50/50 split and no rules for leavers, a founder who leaves early keeps half the company.

AD Solicitors, a separate SRA-regulated law firm, has a guide to the legal documents a startup needs before raising investment.

3. What will the company be called? Check the Companies House register, the trade mark register and whether the web domain you want is available. Some words, such as Bank, Institute and Royal, need permission before a company name can include them.

What this guide covers

The eight steps to set up and register a company
Choosing the number and class of shares
Every registration and deadline for year one
The bank account, software and accountant to set up from the start

Eight steps to set up the company

Choose the type of company. A private company limited by shares (a “Ltd” company) suits almost every startup. Start with one class of ordinary shares, each with a face value (nominal value) of £0.01 or £1. Leave other share classes until there is a reason for them, which is usually when an investor asks for shares with different rights.
Issue enough shares. Incorporate with, for example, 100 or 1,000 shares. With a single share, you cannot sell 10% of the company without first splitting that share into smaller ones, which takes a shareholder resolution and a filing at Companies House.
Appoint directors and choose a registered office. You need at least one director aged 16 or over. The registered office must be an address in the same part of the UK as the company (England and Wales, Scotland or Northern Ireland) where post reaches someone acting for the company, and a PO box cannot be used. The address appears on the public register, so some founders use a service provider's address, such as their accountant's, to keep their home address off it. Since 2024 you also need a registered email address, which is not published, and a statement that the company's purpose is lawful.
Identify your people with significant control. Anyone holding more than 25% of the shares or voting rights is a person with significant control and is named on the public register. Every director and person with significant control must now verify their identity with Companies House. Each director gets a personal code once verified, and you need every director's code to register the company. A person with significant control has 14 days from being added to the register to give theirs. Companies House will not accept an existing company's confirmation statement until all its directors have verified. Allow a few days for this.
Incorporate. Register the company at Companies House for £100 online, which usually takes 24 hours, or £124 by post, which takes 8 to 10 days. An accountant can do this for you along with the registrations below. Choose SIC codes, the standard codes for types of business activity, that describe what the company does.
Register for corporation tax. You can choose to be set up for corporation tax when you register the company. If you do not, add corporation tax to the company's HMRC business tax account within 3 months of starting to do business, which includes buying, selling, advertising or employing someone. HMRC writes to the company with its Unique Taxpayer Reference (UTR), the number used for its corporation tax.
Decide when to register for VAT. You must register once taxable turnover goes over the £90,000 threshold in any rolling 12 months. Registering voluntarily before then can help if your customers are VAT-registered businesses, because you reclaim the VAT on your costs and they reclaim the VAT you charge them. If you sell to consumers, registering early means either adding 20% VAT to your prices or paying it out of your margin. See our VAT for startups guide.
Register for PAYE before you pay anyone. PAYE is the system for taking income tax and National Insurance from pay. Register as an employer before the first payday, including when the only person on the payroll is you as a director. You cannot register more than 2 months before you start paying people.

Bank account, accounting software and an accountant

Open a business bank account in the company's name straight away. Money in it belongs to the company, and mixing it with personal spending makes the first year's accounts slow and expensive to sort out. We recommend:

Mettle, by NatWest. A free business account for companies with up to two owners, with eligible deposits protected up to £120,000 by the Financial Services Compensation Scheme. More about Mettle.
Xero. We are a Xero Gold Partner and set it up for you. Plans start at £18 a month + VAT, paid to Xero. Your bank transactions come in automatically, you photograph receipts on your phone, and it produces the reports a lender or investor will ask for from the first month.
A named accountant and Buzz OS. Accounting and tax starts at £49 a month + VAT. Buzz OS, the platform Buzz built to run your company's accounts with you, is included in the fee. Your filing deadlines, documents and tax estimate are kept in it, and you approve your VAT returns there. Get a quote.

If you take money out of the company as you need it and sort it out later, it builds up as a loan from the company to you, called a director's loan. If a loan made on or after 6 April 2026 is still outstanding nine months and one day after the end of the company's accounting period, the company pays a tax charge of 35.75% of it (under section 455), which is refunded after the loan is repaid. Agree how you will pay yourself, through salary and dividends, in the first month. Our guide to paying yourself shows the usual approach.

Filing and tax deadlines in the first year

Confirmation statement. Filed at Companies House at least once a year, for £50 online. It confirms the information Companies House holds about the company is up to date.
Statutory accounts. Due at Companies House 9 months after the end of your accounting year, or 21 months after incorporation for your first set.
Corporation tax. The tax is due 9 months and 1 day after the end of the accounting period, and the company tax return (form CT600) is due 12 months after it.
VAT returns. Once you are registered, usually every quarter, filed through software that works with HMRC's Making Tax Digital rules.
Payroll. Each time you pay staff, including yourself, you report the pay to HMRC on or before payday. Workplace pension duties start on the day your first employee starts work.
Your own tax return. If you receive more than £10,000 in dividends in a tax year, you file a Self Assessment tax return, due online by 31 January after the tax year ends. Smaller taxable dividends can be reported to HMRC before 5 October instead.

Corporation tax is 19% on profits up to £50,000 and 25% on profits over £250,000. Between the two, marginal relief raises the rate gradually from one to the other. Dividends are paid out of profit after corporation tax, and you pay dividend tax on them personally, so plan how you will pay yourself from the start.

Common mistakes when setting up a company

Incorporating with 1 share, then needing a share split before a co-founder joins.
Missing the 3-month deadline to register for corporation tax while waiting for HMRC to write.
Registering for VAT late. You owe VAT from the date you should have been registered, including on sales where you did not charge it.
Using a personal bank account “just for the first few months”.

We can incorporate the company for you, make each registration that applies and set up Xero and Buzz OS.

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Common questions

How much does it cost to set up a limited company?

Companies House charges £100 to register a company online, or £124 by post. We can also handle the incorporation for you, along with the registrations for corporation tax, VAT and PAYE that apply.

How long does incorporation take?

Online applications are usually registered within 24 hours. Each director has to verify their identity with Companies House before the company can be registered, which can add a few days, so allow a week in total.

Do I need an accountant to start a limited company?

No. Anyone can register a company online. An accountant helps most with the decisions around it, such as the share structure, when to register for VAT, setting up payroll and planning how you will take money out, because mistakes there are expensive to put right later.

When do I have to register for VAT?

When taxable turnover goes over £90,000 in any rolling 12 months, or straight away if you expect turnover in the next 30 days alone to go over £90,000. Registering voluntarily before then can help if you sell to VAT-registered businesses.