The Complete UK New Business Finance Checklist
A step-by-step plan to organise your money in your first year of business — for sole traders, freelancers and limited company directors in the UK.
If you're starting out, focus on five basics: pick the right structure, register with HMRC (and Companies House if a limited company), open a separate business bank account, set up invoicing and start tracking every expense. Add a simple cashflow forecast and review your finances once a month.
1. Decide your business structure
The two most common UK structures are sole trader and limited company. Each has different tax, paperwork and liability implications. Read our guide on sole trader vs limited company for a side-by-side comparison.
2. Register your business
Sole traders register for Self Assessment with HMRC. Limited companies register with Companies House and HMRC for Corporation Tax. Keep your UTR, company number and Government Gateway logins safe.
3. Separate personal and business money
Even as a sole trader, mixing personal and business spending makes bookkeeping painful. A dedicated business account makes month-end faster and gives a clearer picture of profitability.
Mixing money is the single most common reason new businesses underestimate tax bills or run out of cash. Separation pays for itself the first time you reconcile a month.
4. Open a business bank account
You'll typically need ID, proof of address, your registration details and business activity. Most digital providers can open an account in minutes. See how to open a UK business bank account.
£200 free cash
Use referral code REFER200 through our tracked Tide link and meet Tide's current qualifying terms.
Open a Tide business account and get £200 free cash when you use referral code REFER200 and meet Tide's current qualifying terms.
- Free standard UK business account opening
- Invoicing, payment links and expense cards in one app
- Referral code
REFER200required for the £200 free cash offer, subject to current provider terms
5. Set up invoicing and payments
Use a consistent invoice template with all the UK legal essentials. Add a clear payment link and set 14- or 30-day terms. See how to write a UK invoice or use our free invoice generator.
6. Track expenses and receipts
Capture every receipt — paper or digital. HMRC generally expects records to be kept for at least five years after the 31 January submission deadline. See our list of expenses you can claim and grab the expense tracker spreadsheet.
7. Understand the tax basics
Set aside money for tax from day one. As a rough rule of thumb many sole traders set aside 25–30% of profit for Income Tax and National Insurance; the right figure depends on your earnings and personal allowance. Check current rates on GOV.UK.
You must register for VAT once your taxable turnover crosses the current threshold — check the latest figure on GOV.UK as it changes from time to time.
8. Build a simple cashflow forecast
Even a basic 13-week forecast helps you spot quiet months and large bills before they hurt. Use our cashflow forecast template.
9. Decide whether a business credit card may help
A business credit card can help smooth cashflow, separate spend by team member and earn cashback or points on spend you'd make anyway. It is not right for everyone, and borrowing has risks. See credit card vs debit card before applying.
7,500 bonus points
Use promo code SETTINGUP through our tracked Capital on Tap link and meet the current qualifying terms. Credit subject to status.
Apply for Capital on Tap and get 7,500 bonus points when you use promo code SETTINGUP and meet the current qualifying terms. Credit subject to status.
- Earn cashback or Avios on eligible business spend
- Free supplementary employee cards subject to status
- Promo code
SETTINGUPrequired for the 7,500 bonus points offer, subject to current provider terms
10. Set a monthly finance review
Block 30 minutes at month-end to reconcile your account, file receipts, send overdue chasers and update your forecast. Use the monthly finance review checklist.
Your first-year finance checklist
0/10 · 0%Get the free UK Business Finance Toolkit bundle
Checklists, an invoice template, a cashflow forecast and a monthly review — delivered to your inbox.
One email with the bundle, plus occasional UK small-business tips. Unsubscribe anytime. See our privacy policy.
Frequently asked questions
Related guides
How structure affects tax, paperwork and liability.
What you need and how long it typically takes.
A simple 13-week forecast for new businesses.
When each makes sense — and the risks.
Borrowing can put your business and personal finances at risk if not managed carefully. Only borrow what you can afford to repay. Credit is subject to status and eligibility. Check the latest fees, APR and terms with the provider before applying. This site does not provide financial advice.
Some links on this page are affiliate or referral links. If you apply through them we may receive a commission, at no extra cost to you. This does not influence our editorial recommendations — see our editorial policy and affiliate disclosure.
Information on this page is general guidance for UK small businesses and is not financial, tax or legal advice. Tax rules, allowances and product terms change. Always check current information with HMRC, Companies House or a qualified professional before making decisions.