Starting a business in the UK — the Ltd company playbook

Companies House setup:

• £50 same-day online incorporation. Use Companies House WebFiling directly, or a service like SeedLegals, Inkle, or your accountant.
• Required: company name, registered office address (your home address is fine but goes on public record — services like Crunch provide a registered office for ~£100/yr), at least one director (founder), at least one shareholder (often the same founder), share structure (usually 1,000 Ordinary £0.0001 shares allotted to founders).

Day-one paperwork:

• SH01 form when issuing shares (filed via WebFiling, free).
• Subscriber agreement for founder share allotment (SeedLegals templates work fine).
• Statutory registers (members, directors, PSCs — Persons with Significant Control). Most accounting platforms maintain these.
• HMRC corporation tax registration — automatic within 3 months of incorporation.

Founder share structure: standard pattern is two share classes from day one: Ordinary (founders) and Preferred (future investors). Set this up at incorporation rather than restructuring at the first round — restructuring costs ~£3-5k in legal fees and weeks of delay.

SEIS (Seed Enterprise Investment Scheme): investors get 50% income tax relief on the amount invested (up to £200k per investor per year), capital gains tax exemption on profits, and loss relief if the company fails. Company can raise up to £250k total under SEIS.

EIS (Enterprise Investment Scheme): 30% income tax relief (up to £1M per investor per year, £2M if investing in 'knowledge-intensive companies'), CGT exemption, loss relief. Company can raise up to £12M lifetime under EIS, £5M per year.

Why this matters: UK angels and seed funds will not invest unless you have SEIS or EIS advance assurance. The relief makes the math work for the investor. Companies that haven't applied are systematically passed over.

Qualifying criteria (simplified — there are many):

• Trading company (not investment, not property, not financial services)
• UK permanent establishment
• Under £15M gross assets pre-investment
• Under 25 employees (SEIS) / 250 employees (EIS)
• Less than 3 years old at first SEIS share issue (or 7 years from first commercial sale for EIS)

The process: apply for Advance Assurance via HMRC's online portal before taking investor money. Turnaround is 4-12 weeks. Without advance assurance, investors won't write the cheque. Use SeedLegals or your accountant — they apply on your behalf for ~£500.

VAT: mandatory registration above £90,000 of UK taxable turnover in any rolling 12-month period (as of 2024 — confirm the current threshold). Below that, you can voluntarily register if your customers are VAT-registered businesses (they reclaim the VAT, and you can reclaim VAT on your own purchases). For SaaS selling to consumers, stay unregistered until you cross the threshold.

Founder salary vs dividends: the most-misunderstood UK founder topic. Director salary is taxed as employment income (income tax + NIC). Dividends are taxed at lower rates (8.75% / 33.75% / 39.35% bands above the £500 allowance) but only paid from after-tax profits. Most UK founders pay themselves a small salary up to the NIC primary threshold (~£12,570/yr) plus dividends above that. Your accountant runs the calculation each tax year — don't DIY.

EMI options for employees:

• Tax-advantaged option scheme: employee pays nothing at exercise, only 10% CGT (with Business Asset Disposal Relief) at sale.
• Qualifying company: <250 employees, <£30M gross assets, qualifying trade.
• Per-employee limit: £250k of options at grant value.
• Per-company limit: £3M of unexercised options at any time.
• File the EMI notification with HMRC within 92 days of granting each option, or the EMI tax advantages are void.

EMI is one of the biggest founder-friendly schemes globally — use it. Set up via SeedLegals or your accountant for ~£1,500 one-off + £100/yr admin.