Starting a business in North London takes a short list of steps done in the right order. Most first-year problems come from doing them out of order: trading before the structure is decided, spending before there is a separate account, registering for VAT after the date that counted. The order below is the one we take new clients through.

1. Choose the structure: sole trader, partnership or limited company, based on expected profit and risk, not habit
2. Register it: as a sole trader with HMRC for self-assessment, or as a company at Companies House, where every director and person with significant control has had to verify their identity since 18 November 2025
3. Open a separate business bank account, so business money and personal money never have to be separated later
4. Set up bookkeeping software on day one, linked to that account, so the records build up as you trade
5. Make the VAT decision: compulsory at £90,000, but sometimes worth doing voluntarily earlier
6. Put the first-year deadlines in a calendar before the first invoice goes out

First-year deadlines

For a sole trader, you register for self-assessment by 5 October after the end of the first tax year. The first return and payment are due by 31 January. That first January bill often includes a payment on account towards the next year too, with another on 31 July. For a company, corporation tax is due nine months and one day after the year end, accounts go to Companies House within nine months, and the CT600 return within twelve months. The quirks of a company’s first year are explained further down this page.

VAT registration is the decision new businesses in North London most often put off. You have to register once turnover in any rolling twelve months passes £90,000, or as soon as you expect to pass it in the next thirty days alone. That second test catches new businesses that land one large contract early on, so check it before you sign, not after.

Registering voluntarily from day one can make sense if your customers are VAT-registered businesses and you have large set-up costs. You reclaim the VAT on the fit-out or equipment, and your customers reclaim what you charge them. If you sell to the public, registering early usually just makes you 20% more expensive than competitors who have not.

Once registered, you file through Making Tax Digital software. If you choose the Flat Rate Scheme, check whether you will be a limited cost trader, paying 16.5% of gross turnover. For a new service business that often removes the benefit. We model both routes on your forecast before you apply.

A sole trader keeps things simple: no filing at Companies House, no separate corporation tax return, nothing published. The trade-off is unlimited personal liability and, above a certain profit, a higher overall tax cost. A company limits liability, is often more tax-efficient once profits are established, and looks more substantial to larger customers — at the price of public accounts, a director's legal duties, and more administration.

The crossover point depends on your profit, whether you need to draw everything you earn, and what your customers expect. We run the figures both ways rather than starting from an assumption.

Two founders taking fifty percent each is the most common arrangement and the one that causes the most trouble, because neither can carry a decision if they fall out. Think about what happens if one of you leaves early — shares that vest over time protect the person who stays. If you intend to raise investment later, keep the structure simple: SEIS and EIS relief matter enormously to early investors, and an unusual share class or an early misstep can put that relief out of reach.

• Corporation tax — within three months of starting to trade
• PAYE — before the first payment to any employee, including yourself
• VAT — compulsory above the threshold, sometimes worth doing voluntarily before it
• Self-assessment — for each director drawing dividends

Voluntary VAT registration is worth considering if your customers are VAT-registered businesses, because they recover what you charge and you recover what you spend. If you sell to the public it usually just makes you more expensive. It is a commercial decision as much as a tax one.

If you are raising from private investors, the Seed Enterprise Investment Scheme is the single most valuable thing to understand before you take any money.

It gives an investor income tax relief on what they put in, exemption from capital gains on the growth if the shares are held long enough, and relief against income if the company fails — which is why an SEIS-qualifying round is dramatically easier to raise than one that is not. EIS does something similar for larger raises once SEIS is used up.

The conditions are strict and several of them are about timing. The company has to be young enough, small enough and doing a qualifying trade; the shares must be new ordinary shares, fully paid in cash, with no preferential rights; and advance assurance from HMRC before the round is what most investors will ask to see.

The part that catches founders is that it is easy to disqualify a round by accident — the wrong share class, money received before the paperwork, or an investor who is connected to the company. Once the shares are issued it cannot be undone.

Expenditure in the seven years before trading begins can generally be relieved as if it were incurred on the first day of trade. Equipment, software, professional fees, market research and the incorporation itself usually qualify.

People throw these receipts away because the business did not exist yet. Keep them — for most start-ups the pre-trading total is enough to matter in the first profitable year, and VAT paid before registration can also be reclaimed within limits once you register.

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The dates a new company is given at incorporation are decided by when it was registered, and they produce a first year that almost nobody expects. Understanding it early prevents a series of small, avoidable penalties in year one.

The first accounting period is usually longer than a year

Companies House sets your first accounting reference date to the end of the month in which the company was incorporated, one year later — so a company formed on 10 March gets a first period running to 31 March the following year, which is twelve months and three weeks.

But a corporation tax period cannot exceed twelve months

Which means that longer first period has to be split for tax: one return for the first twelve months and a second for the remaining days. Two returns, two computations, for a single set of accounts. Founders who file one and consider the matter closed receive a penalty for the one they did not know existed.

You can change the date, and sometimes should

The accounting reference date can be shortened, and doing so early is straightforward. It is worth thinking about rather than accepting the default: aligning your year end with the natural rhythm of the business, or with the tax year, can make everything downstream simpler — and if your trade is seasonal, having a year end at the quiet point means counting stock when there is least of it.

The deadlines are not the same either

Accounts go to Companies House on one timetable, the corporation tax return goes to HMRC on another, and the tax itself is payable earlier than the return is due — which reliably surprises people, because it means the payment deadline can pass before the figure has been finalised.

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Most of the people who come to us as an accountant for a new business in London arrive before they have registered anything, and that is the best time. The first meeting covers structure, the registrations and the calendar. After that we set up the bookkeeping so the first year’s accounts come from the records rather than from a shoebox. Once you are trading, the day-to-day work moves onto our small business service, and the wider practice is there for personal tax and anything else that comes up.

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The services we provide for new businesses include bookkeeping, VAT returns and registration, year-end accounts and corporation tax and payroll. Each has its own page with what is included and how we work.