If you’re looking to join the 4.3 million people in the UK who made the jump into self-employment, you might be wondering how to start your new business.
Assuming you’ve weighed up the pros and cons involved and decided launching a startup is right for you, one of the first things to consider is how will you pay tax?
This requires you to choose a structure for your new business. The three most popular options are sole proprietorship, general partnership or limited company.
Last year, operating as a sole trader was the most common structure as around 3.2m sole traders accounted for 56% of the UK’s entire private-sector business population.
By comparison, there were 2m actively-trading companies and 384,000 general partnerships, making up 37% and 7% of the business population, respectively. You can also be a limited liability partnership.
The vast majority of those sole proprietors are genuine one-man bands; that’s to say they don’t have any employees (in an official capacity, at least).
There’s no rhyme or reason for going it alone and it’s worth being aware of the key options on the table when you start a business. You can also change your business’s structure whenever you like, although that can prove costly.
You might be interested in...
01 May 2026
As we've now entered the new tax year, we've outlined below how to prepare for the new tax system changes for 2026/27 and why planning ahead for your tax return in January 2027 is advised. Read our blog for an overview of the upcoming changes.
Learn more
New Tax System Changes for 2026/2730 Apr 2026
Statutory accounts show the past. Management Information delivers timely insights into performance and cash flow, driving better commercial decisions.
Learn more
Why good Management Information is essential for Business Growth
28 Apr 2026
While you can’t control geopolitical tensions, economic volatility, shifting regulations, you can control how your business is structured to respond to them
Learn more
When To Review Your Business Structure
28 Apr 2026
Market volatility and deal pace are changing how SME owners view risk and reward. Read our insights on value creation in today’s M&A market.
Learn more
Increasing the Value of your Business
27 Apr 2026
Compliance matters, but most commercial problems do not arrive neatly at month end. Modern finance supports decisions as they happen, not just records them afterwards.
Learn more
Building a Better Business with an Outsourced Finance Function
20 Apr 2026
For many businesses, the loss of the key person can cause disruption. Having Key Person Insurance can ease financial risk and uncertainty.
Learn more
What Is Key Person Insurance and Why Does It Matters for Your Business?