The no nonsense guide
How Much Does It Cost to Start a Business in the UK?
Published 18 August 2026 · 6 min read
Short answer: less than you think. Registering as a sole trader is free. A limited company costs about £63 all in. Most service businesses can be trading, insured, and online for under £1,000. Shops and cafés cost more because stock and premises cost more. Here are the real numbers.
The costs every business shares
Whatever you are starting, the same foundation layer appears. None of it is expensive. All of it is worth doing properly, because everything else gets built on top.
- Registering as a sole trader with HMRCFree
- Forming a limited companyFrom about £13 plus the £50 Companies House fee
- A domain nameRoughly £10 to £15 a year for a .com or .co.uk
- A designed one page website£295 fixed through the NameGenie Launch Site
- Business insuranceTypically £60 to £500 a year depending on trade
- Accounting software or an accountantRoughly £10 to £150 a month
Two of these deserve a warning. First, the Companies House fee is £50 however you file; what a formation agent adds from about £13 is the checked filing and extras like a registered office address. Second, domains have two prices: the first year and the renewal. Check the renewal before you buy.
Typical totals by business type
Startup cost is mostly decided by one question: does the business need stock or premises? Here are realistic day one ranges, each linked to a full guide with the itemised numbers.
- Cleaning businessunder £1,000
- Consultancyunder £1,000
- Personal training businessunder £700 if qualified
- Photography businessunder £800 with kit owned
- Online shop£1,000 to £6,000
- Café£30,000 to £150,000
What costs nothing
A surprising amount of the setup is free. Registering as a sole trader with HMRC costs nothing. Checking whether your business name is free at Companies House costs nothing. Checking the domain costs nothing. Most business bank accounts for new companies are free to open. The expensive mistake is skipping the free checks: falling for a name whose domain is taken, or filing a company name the register rejects, costs you days and sometimes reprinted everything.
That is the order to work in: check the name everywhere first, spend second. NameGenie runs the domain and Companies House checks on every name it generates, which makes the free part instant.
Questions founders ask
What is the cheapest way to start a business in the UK?
Register as a sole trader (free), trade under your own name, and sell before you spend. Add the limited company, insurance, and website when revenue justifies them. For many service businesses that whole professional layer still lands under £1,000.
How much does a limited company cost to run each year?
The confirmation statement is £34 a year online. Accounts filing is free to do yourself; accountants typically charge from a few hundred pounds a year for a small company. Budget for corporation tax on profits, and remember dormant companies still file.
Do I need an accountant from day one?
Sole traders with simple income often manage with software. Limited companies have more filing obligations, and most owners find an accountant pays for itself in avoided mistakes and claimed expenses. From roughly £30 a month for basic small company support.