Ethical Accountant

You’ve chosen your business structure. Now what?

Starting a business involves more than just hanging out your sign and waiting for customers. Get the fundamentals right now, and you’ll save yourself headaches, money, and potential legal issues down the line.

This is your complete checklist for starting your business properly – from registration to tax planning, with the practical details other guides leave out.

Table of Contents

1. Register Your Business
2. Calculate Your Startup Costs
3. Understand Your Industry Legislation
4. Set Up Your Business Bank Account
5. Get the Right Business Insurance
6. Set Up Your Bookkeeping System
7. Get Your Invoicing Right
8. Plan for Your Tax Liability
9. Sort Your Marketing Presence
10. Choose Your Accountant

The Legal Essentials

1. Register Your Business

How you register depends on your structure (if you’re not sure which to choose, read How to Choose the Right Business Structure].

If you’re a Sole Trader:

• Register with HMRC for self-employment
• Do this by 5 October following your first tax year of trading
• It’s free and takes about 10 minutes online
• You’ll get a Unique Taxpayer Reference (UTR) number
• From April 2026, also sign up for Making Tax Digital for Income Tax

If you’re in a Partnership:

• Register the partnership with HMRC
• Each partner needs to register for Self Assessment individually
• You’ll nominate a lead partner to submit the partnership return
• Create a partnership agreement (I’ll explain why this matters in a moment)

If you’re a Limited Company:

• Register with Companies House (£12 online, £40 by post, £50 same-day service)
• This automatically registers you for Corporation Tax with HMRC
• You’ll need:
• Company name (check it’s available first)
• Registered office address
• At least one director and one shareholder
• Details of share structure
• Articles of Association (standard template available)
• You’ll receive a Certificate of Incorporation with your company number
• Register for PAYE if you’re paying yourself or employees
• Register for VAT if your turnover will exceed £90,000 (or voluntarily if beneficial)

If you’re a CIC:

• Follow the limited company process but include the additional CIC section
• Define your community interest and asset lock
• Budget for the annual CIC report and £15 fee

Timeline: Most registrations are instant or within 24 hours. Companies House registration is usually within 3-6 hours online.

2. Calculate Your Startup Costs

Before you dive in, work out what this is actually going to cost you. Being realistic about startup costs prevents nasty surprises.

Common startup costs include:

One-off costs:

• Registration fees (company registration if applicable)
• Website design and hosting
• Business insurance (first year)
• Initial equipment (laptop, phone, tools, machinery)
• Initial stock or materials
• Professional fees (accountant, legal advice)
• Branding and logo design
• Business cards and marketing materials

Ongoing monthly costs:

• Premises or rent (office, workshop, storage)
• Utilities and internet
• Software subscriptions (accounting, design, project management)
• Professional memberships
• Marketing and advertising
• Accountancy fees
• Bank fees
• Phone contract

Don’t forget:

• Buffer for quiet months (3-6 months of personal expenses ideally)
• Emergency fund for equipment repairs or unexpected costs
• Money for tax (more on this later)

Reality check: Most businesses underestimate their startup costs. Add 20-30% to your initial calculation to be safe.

When I work with new clients, I help them create a realistic first-year budget that includes:

• Review expected income and expenses with clients and create at least 2 budgets, a worst case and ideal case scenario. 
• It surprises people how much in sales they need to start making a profit. 
• Excel or google sheets is a great place to start, to get an idea of start-up costs as it is easy to do and it’s free. 

One client budgeted £5,000 for startup costs but hadn’t factored in professional indemnity insurance at £800 or the fact their accounting software would cost £300/year not the £15/month they’d seen advertised (which was just the basic plan).

3. Understand Your Industry Legislation

Different industries have different rules. Don’t assume that because someone else in your field isn’t doing something, it’s not required – they might just be getting away with it (for now).

Common requirements across industries:

Data Protection (GDPR): If you collect any customer information (emails, names, addresses), you need to:

• Understand your responsibilities under GDPR
• Have a privacy policy
• Store data securely
• Know how to handle data requests
• Register with ICO if you’re processing sensitive data or large-scale processing (£40-£2,900 annually depending on size)

Health & Safety: If you have employees or a workplace others visit:

• Risk assessments
• First aid provision
• Health and safety policy (if 5+ employees)
• Employer’s liability insurance

Industry-specific requirements might include:

• Food hygiene certificates (food businesses)
• DBS checks (working with vulnerable people)
• Professional registrations (healthcare, legal, financial services)
• Licenses (alcohol, taxis, street trading, music venues)
• Planning permission (change of use for premises)
• Building regulations (construction, renovations)
• Waste carrier license (if you transport waste)

How to find out what you need:

• Check your industry trade body website
• Look at your local council’s business pages
• Search “[your industry] UK regulations”

Don’t skip this step. Operating without the right licenses or registrations can result in fines, prosecution, and having to shut down.

4. Set Up Your Business Bank Account

You need a separate bank account for your business. This isn’t just good practice – it makes bookkeeping infinitely easier, protects you in tax investigations, and is often required for certain business structures.

Why you need a separate account:

• Makes tracking income and expenses simple
• Protects your personal money if business has issues
• Required for limited companies (legally must be in company name)
• Makes your tax return or accounts preparation quicker (and cheaper)
• Looks more professional to clients

Choosing a bank:

Free options include:

• Starling Bank – app-based, good functionality, instant notifications
• Monzo – similar to Starling, good for digital-first businesses
• Tide – designed for small businesses, built-in accounting features
• NatWest – free for some business types, traditional banking
• HSBC – free period, then paid

Paid options often include:

• More transactions included
• Cash deposit facilities
• Dedicated account manager
• Overdraft facilities
• Integration with accounting software

Consider ethical banking:

Your bank doesn’t just hold your money – it invests it. If you care about where your money goes, look at ethical options.

Tools to check your bank’s ethics:

• bank.green – shows you how your bank invests deposits
• Look for B Corp certified banks
• Check fossil fuel investment policies

Ethical banking options:

• Triodos Bank – B Corp certified, only lends to positive projects, transparent about where money goes
• Starling Bank – carbon-neutral, more ethical lending policies than traditional banks
• Monzo – working towards more sustainable practices, transparent operations

The difference? Traditional banks might use your deposits to invest in fossil fuels, weapons, or industries you wouldn’t personally support. Ethical banks have strict policies about where money goes.

In my business, I use Starling & Tide because these are ranked well on Bank.Green and are also have easy to use apps. When I help clients choose their banking, I consider:

• The size of their business and the types of income they receive (cash, card etc)
• Having an ethical bank is really important to me but so is usability, that is why it is important to look at each option, luckily there are quite a few ethical banking options. 
• Using Bank.Green was a great tool as I could check which banks are the most ethical and review which of these suited my needs. 

Most of my clients end up with Starling because of how easy the app is to use.

What you’ll need to open an account:

• Proof of identity (passport or driving license)
• Proof of address
• Business registration documents (certificate of incorporation if limited company)
• Details of directors/partners/owners

Timeline: Digital banks often approve in minutes. Traditional banks can take 2-4 weeks.

5. Get the Right Business Insurance

Insurance feels like a grudge purchase until you need it. Then it’s priceless.

Common types you might need:

Public Liability Insurance

• Covers injury to third parties or damage to their property
• Required if you work in client premises or public interacts with your business
• Typical cost: £50-£200 per year
• Common for: Tradespeople, events, retail, anyone working on-site

Professional Indemnity Insurance

• Covers claims of professional negligence or mistakes in advice
• Often required by contracts or professional bodies
• Typical cost: £200-£1,000+ per year depending on turnover and risk
• Common for: Consultants, accountants, designers, coaches, anyone providing advice

Employers’ Liability Insurance

• Legally required if you have employees
• Covers claims from employees for injury or illness from work
• Must have at least £5 million cover (most policies offer £10 million)
• Typical cost: £100-£300 per year
• Required even if employees are family members

Other insurance to consider:

• Buildings insurance – if you own your premises
• Contents insurance – for equipment, stock, furniture
• Business interruption insurance – covers lost income if you can’t trade
• Cyber insurance – increasingly important for digital businesses
• Product liability – if you manufacture or sell products
• Vehicle insurance – business use often needs commercial policy

How much do you need?

• Check contract requirements (clients often specify minimum cover)
• Look at professional body recommendations
• Consider your actual risk (what’s the worst-case claim?)

Don’t be underinsured to save money. A £50 difference in premium could mean £1 million difference in cover.

6. Set Up Your Bookkeeping System

Good bookkeeping isn’t optional. It’s how you understand your business, make decisions, and avoid horrible surprises at tax time.

What bookkeeping actually means:

• Recording every penny that comes in (income)
• Recording every penny that goes out (expenses)
• Categorising everything correctly
• Keeping evidence (receipts, invoices, bank statements)
• Reconciling your records with your bank account
• Being able to report on what’s happening financially

The software question:

Software makes bookkeeping faster and easier, but it won’t do it for you. You still need to understand what you’re doing.

Software companies love to sell you on “automatic bookkeeping” – connect your bank, and everything magically categorises itself. The reality? It gets it wrong. A lot. If you don’t understand bookkeeping, you won’t spot the mistakes, and you’ll end up with incorrect accounts and potentially wrong tax returns.

Good bookkeeping software should:

• Connect to your bank account (but you still review everything)
• Create and send invoices
• Track expenses and allow receipt uploads
• Generate reports (profit and loss, balance sheet)
• Handle VAT if you’re registered
• Connect with your accountant
• Store everything securely

Popular options:

• Xero – powerful, great for growing businesses, good accountant support (£12-£30/month)
• QuickBooks – comprehensive, good reports (£10-£35/month)
• FreeAgent – designed for small businesses and freelancers, good for sole traders (£15-£29/month) free options with NatWest accounts. 
• Sage – traditional, comprehensive, learning curve, incorporates carbon calculator (various prices) 

What about spreadsheets? You can absolutely use spreadsheets, especially at the start. They’re free and flexible. But:

• You need to know what you’re doing
• They don’t connect to your bank
• No automatic invoicing
• Easy to make mistakes
• Harder to collaborate with accountant 
• Won’t have up to date reports
• Time-consuming as you grow

What I recommend:

I use Xero for my own business because I find the interface easy to use. For my clients, I usually recommend:

• I would recommend Xero for most types of businesses
• This is because it is easy to use. 
• The most common mistake I see is with bank reconciliations, this ranges from marking items as paid when they aren’t to adding expenses to the wrong account. 
• I offer bookkeeping services, work with other bookkeepers and offer support and reviews if you want to do your own bookkeeping. 

The most important thing isn’t which software you use – it’s that you use it consistently and understand what you’re recording.

I had a client who used Xero for 18 months but never reconciled their bank. When we came to do their accounts, there were 200+ unreconciled transactions and it took days to sort out. Regular reviews would have meant 10 minutes a week instead of days of catch-up.

Essential bookkeeping habits:

1. Record everything as it happens – don’t leave it for month-end
2. Reconcile weekly – check your software matches your bank
3. Keep all receipts – photos on your phone work fine
4. Review monthly – check you’re profitable and understand the numbers
5. Back up regularly – though most cloud software does this automatically

7. Get Your Invoicing Right

Your invoice is both a legal document and a marketing tool. Get it wrong and you might not get paid – or worse, HMRC might not accept it as valid.

What legally must be on your invoice:

For sole traders and partnerships:

• Your name (and business name if different)
• Your address
• Description of goods or services
• Amount charged
• Date
• Unique invoice number

For limited companies, you also need:

• Company registration number
• Registered office address
• VAT number (if VAT registered)

If you’re VAT registered, you also need:

• VAT number
• VAT breakdown (rate and amount)
• Total excluding and including VAT

What else should be on there:

Make your invoice professional and clear:

• Client’s name and address
• Purchase order number (if they gave you one)
• Payment terms (e.g., “Payment due within 7 days”)
• How to pay (bank details, payment link)
• Your contact details
• Thank you message

Common invoicing mistakes:

• Missing invoice numbers or duplicating numbers
• Wrong VAT calculations
• Vague descriptions (“Services rendered” – be specific)
• No payment terms (makes it hard to chase late payment)
• Missing dates
• Not keeping copies

Payment terms matter:

Standard is 30 days, but you can set whatever you want:

• “Payment due on receipt” – for immediate payment
• “Payment due within 14 days” – faster turnaround
• “Payment due within 30 days” – standard for most businesses
• “Deposit of 50% required, balance due on completion” – for project work

Include late payment terms: “Late payment fees may apply as per the Late Payment of Commercial Debts Act” – you can charge interest and recovery costs on late B2B payments.

Using software for invoicing:

Most bookkeeping software includes professional invoice templates that:

• Include all legal requirements
• Auto-number invoices
• Track who’s paid and who hasn’t
• Send automatic payment reminders
• Let clients pay online
• Look professional

My own invoices include date, invoice number, payment details, description and payment terms. When I help clients set up their invoicing, I make sure they:

• Use accounting software to make invoicing easier and consistent. 
• Include a good description (On accounting softwares you can set up service templates) 
• Have clear terms, withhold deliverables and regularly chase to avoid late payers.

One client was losing track of who had paid because they just sent Word document invoices by email. When we set up Xero invoicing, they discovered they had £8,000 in unpaid invoices from the last 6 months they’d completely forgotten to chase.”

8. Plan for Your Tax Liability (The Surprise Nobody Warns You About)

This is where most new business owners get caught out. You’re making money, spending it as you go, and then BAM – tax bill arrives and there’s no money left to pay it.

How much should you save?

Sole traders and partnerships:

• Income Tax: 20% on profits £12,571-£50,270, then 40%, then 45% over £125,140
• Class 2 National Insurance: £3.45/week (£179.40/year) if profits over £6,725
• Class 4 National Insurance: 6% on profits £12,570-£50,270, 2% above that
• Rule of thumb: Save 25-35% of your profit for tax

Limited companies:

• Corporation Tax: 19% on profits up to £50,000, then marginal rate up to 25% on profits over £250,000
• Dividend Tax: 8.75% (basic rate), 33.75% (higher rate), 39.35% (additional rate) on dividends over £500 allowance from 6 April 26 these will rise to 10.75%, 35.75% and 41.75% 
• Rule of thumb: Company saves 19-25% for Corporation Tax, you save 20-35% of dividends personally 

Set up a tax savings account:

Open a separate savings account specifically for tax:

• Transfer your tax percentage every time you get paid
• Don’t touch it except for tax payments
• Treat it as already spent (because it is)
• Look for notice accounts with better interest rates

Example: You invoice £3,000. Transfer £750-£900 straight to your tax account. Live on the rest. When tax time comes, the money is there.

I set up a savings account and save 20% of estimated profits each month. When I help clients plan for tax, I recommend:

• Set up a business savings account for tax purposes. 
• Calculate saving percentage based on the tax rate you are paying 

Every client I onboard, I recommend they set up a tax savings account. I’ve seen too many people scrambling to pay tax bills, taking loans, or getting into payment plans because they didn’t save as they went.

The Tax Surprise Nobody Warns You About: Payments on Account

Here’s what catches people out: in your first year of trading as a sole trader, you don’t just pay tax on that year’s income. You also pay an advance payment toward next year.

How it works:

Let’s say you’re a sole trader and owe £3,000 in tax for your first year of trading (2024/25).

What you’ll actually pay:

January 2026:

• £3,000 (tax for 2024/25)
• £1,500 (first payment on account for 2025/26)
• Total: £4,500

July 2026:

• £1,500 (second payment on account for 2025/26)

January 2027:

• Any additional tax for 2025/26 (if you earned more)
• Or a refund (if you earned less)
• Plus first payment on account for 2026/27

This is brutal if you’re not expecting it. In your first January, you’re paying 1.5 times your annual tax bill.

How to prepare:

1. Know this is coming
2. Save for it from day one
3. In your first year, save extra in the second half to cover the January surprise
4. If your income drops significantly, tell your accountant – you can reduce payments on account

This is the first thing I explain to new clients because this is often missed. I help them:

• To keep bookkeeping up to date, to have an idea of profits as you go along.
• Put aside savings towards tax each month into a separate savings account.

I had a client making £60k profit in their first year. They knew they’d owe about £12,000 in tax. What they didn’t know was they’d need £18,000 in January – £12k for year 1 plus £6k payment on account. They’d spent the money on business growth and had to scramble for a loan. Now all my clients know about this before they start.

9. Sort Your Marketing Presence

You can have the best business in the world, but if nobody knows you exist, you won’t get customers.

The basics you need:

Professional email address:

• Use your domain name (you@yourbusiness.co.uk)
• Not Gmail or Hotmail (looks unprofessional)
• Cost: £5-10/month usually

Website: You don’t need anything fancy to start, but you need something:

• What you do
• Who you help
• How to contact you
• Social proof (testimonials, case studies)
• Basic SEO (so people can find you)

Options:

• DIY website builder (Squarespace, Wix, WordPress) – £10-30/month
• Hire a designer – £500-£5,000+ depending on complexity
• Start with a one-page site and expand later
• Consider hosting providers using renewable energy 

Social media presence: Choose 1-2 platforms where your clients are:

• LinkedIn for B2B and professional services
• Instagram for visual businesses and B2C
• Facebook for local businesses and community building
• TikTok for reaching younger audiences
• Twitter/X for thought leadership and real-time engagement

Don’t try to be everywhere – do 1-2 platforms well rather than 5 badly.

Google My Business: If you serve local customers, claim and optimize your Google My Business listing (free):

• Shows up in local searches
• Lets customers find your hours, location, contact info
• Enables reviews
• Shows photos of your business

Networking:

• Join local business groups
• Attend industry events
• Connect with complementary businesses for referrals
• Online communities in your niche

10. Choose Your Accountant (Before You Need One)

Here’s the truth: you should choose your accountant before you start trading, not when your tax return is due.

Why it matters:

A good accountant doesn’t just file your tax return. They:

• Help you choose the right business structure
• Set up your bookkeeping correctly from day one
• Advise on what expenses you can claim
• Help you plan for tax so you’re never caught out
• Spot opportunities to save money
• Keep you compliant with regulations
• Answer questions as they come up
• Help you make better business decisions

Getting an accountant at the end of the year to “just do my tax return” means you’ve missed 12 months of advice, potentially made expensive mistakes, and are paying them to fix problems instead of prevent them.

What to look for in an accountant:

Qualifications:

• Chartered Accountant (ACA, ACCA, AAT) or equivalent
• Registered with a professional body
• Holds Professional Indemnity Insurance
• MTD ready (for Making Tax Digital)

Experience:

• Works with businesses your size and industry
• Understands your business model
• Up to date with current regulations
• Proactive, not just reactive

Communication:

• Explains things in plain English
• Responds to queries promptly
• Makes you feel comfortable asking questions
• Regular check-ins, not just once a year

Values alignment: If you care about ethics and sustainability, find an accountant who does too:

• Actively reducing their own environmental impact
• Helps clients build sustainable businesses
• Understands B Corp and social enterprise models
• Recommends ethical suppliers and banks
• Sees business as a force for good, not just profit

Fees:

• Clear pricing structure
• No hidden charges
• Fixed fees where possible
• Payment plans if needed
• ROI – good accountants save you more than they cost

Red flags:

• Pushing aggressive tax avoidance schemes
• Poor communication
• No qualified staff
• Very cheap (often means very basic service)
• Not interested in your business, just in filing returns

Green & Moore Accountancy Ltd 

We embed environmental decisions into the core of our business and help our clients implement environmental actions.

Why work with me?

We are registered with AAT and have over 20 years of experience. You will always deal with the same person and you will be working with a practice that is monitoring and implementing environmental initiatives. 

My approach to working with clients:

• We start with a free 30 minute discussion to see what you need and if we are a good fit.
• Support is built into your fee so you don’t need to worry about contacting us. 
• The environment is built into all of our policies and decisions, so you know your values are shared. 
• Sign up is simple with our online portal which is also used for any documents and e-signing. 

I work with businesses who are purpose-led and help them reduce the stress of their numbers.

My fees: Our limited company fees start from £65pm and our sole trader fees start from £25pm (Charges are on a monthly basis over 12 months, in advance of the year end via Direct Debit). 

What’s included:

• Preparation and submission of accounts and tax returns.
• General email queries and support
• Additional services available such as Payroll, VAT, Software set up, Tax Advice, Personal tax returns. 

Your First Month Checklist

Let’s bring it all together. Here’s what you should have done in your first 4 weeks:

Week 1: ✓ Registered your business structure ✓ Calculated your startup costs ✓ Identified your industry legislation requirements

Week 2: ✓ Opened a business bank account (ethical option considered) ✓ Arranged appropriate business insurance

Week 3: ✓ Set up your bookkeeping system ✓ Created professional invoice templates ✓ Opened a tax savings account and set up automatic transfers

Week 4: ✓ Established your basic marketing presence ✓ Chosen your accountant (hopefully me!)

Plus ongoing: ✓ Recording every transaction ✓ Saving for tax with every payment received ✓ Keeping all receipts and invoices ✓ Reviewing your numbers at least monthly

Common Mistakes I See (And How to Avoid Them)

After helping 100’s of businesses, here are the mistakes I see repeatedly:

1. Leaving registration until the last minute Register as soon as you start trading, not when your first tax return is due. You might face penalties for late registration.
2. Mixing business and personal money Even if you’re a sole trader, keep separate accounts. Your future self (and accountant) will thank you.
3. Not keeping receipts “I definitely spent £500 on equipment” doesn’t work without receipts. Photo them immediately and store them properly.
4. Ignoring the numbers until tax time. Review your finances monthly. Surprises at year-end are never good surprises.
5. Choosing the cheapest option for everything: Cheap accountants, cheap insurance, free bookkeeping – you often get what you pay for. Invest properly.
6. Not saving for tax This is the number one way businesses get into trouble. Save as you go.
7. Trying to do everything themselves. Your time is valuable. Pay experts for things outside your expertise so you can focus on what you do best.

You Don’t Have to Do This Alone

Starting a business is exciting, terrifying, and overwhelming all at once. The practical stuff – registration, bookkeeping, tax planning – can feel like a distraction from actually building your business.

That’s where I come in.

I help people start their businesses the right way – ethical, sustainable, and set up for success. Not just compliant, but confident.

Whether you need full support through setup or just someone to check you’re on the right track, I’m here to help.

Ready to Get Started?

Book a free 30-minute discovery call and let’s talk about your business. I’ll help you understand:

• What you need to do and in what order
• What it’s going to cost (really)
• How to avoid the common mistakes
• How to build sustainability into your business from day one

No sales pitch, no jargon – just practical advice from someone who wants to see you succeed.

Book Your Free Discovery Call

What Next?

You’ve got your business structure sorted and you know what to do to set up properly (this article).

Next up: building your environmental credentials and making your business genuinely sustainable – not just compliant, but competitive.

Coming soon:

• How to Review Your Green Operations (Even When You’re Just Starting Out)
• Setting Environmental Goals That Actually Make Business Sense
• The B Corp Guide for Small Businesses

Green & Moore Accountancy Ltd 

We embed environmental decisions into the core of our business and help our clients implement environmental actions.

Connect with me:

• Email: info@greenandmoore.co.uk
• LinkedIn: David Moore

Let’s build your business the right way – from day one.