HMRC Registration Basics for New UK Startups

Companies House gives you a company. HMRC gives you tax registrations. The two systems are connected but not unified, and several of the obligations only become live once you start to trade. Founders who assume HMRC is automatic from Companies House run into late-notification penalties calculated against tax that should have been collected during the unregistered period. This guide covers the four registrations every UK startup needs to know about.

Registration 1: Corporation tax

The first and most fundamental HMRC registration. Your company is liable for corporation tax on profits from the moment it starts to trade. Within three months of trading, the company must notify HMRC of its existence and confirm:

• The company's 10-digit Unique Taxpayer Reference (UTR), which HMRC sends automatically after Companies House notifies them of incorporation. Wait for this letter; do not register without it.
• The accounting reference date (when your accounting period ends). Companies House defaults to the anniversary of incorporation. You can change it once.
• The date you started to trade. This drives the start of the corporation tax accounting period.
• The principal business activity. Free-text field. Be specific but not over-narrow.

Register via the company's HMRC business tax account at gov.uk. The corporation tax UTR you receive is the reference you will use for every CT600 return for the life of the company.

Registration 2: VAT

VAT registration is required when your taxable turnover exceeds £90,000 over a rolling 12-month period (the threshold from April 2024). It is also required if you expect to exceed £90,000 in the next 30 days alone. Many startups also register voluntarily before hitting the threshold to reclaim VAT on costs and signal credibility to enterprise customers.

Registration 3: PAYE

PAYE is the system through which employers deduct income tax and National Insurance from employee pay before it reaches the employee. It applies the moment any employee earns above the Lower Earnings Limit (£123 per week in 2026), or any director takes a salary, regardless of amount.

For a startup with founder-directors, the most common PAYE trigger is the founders themselves taking a small salary as part of a tax-efficient extraction strategy. The standard approach: pay the founder a salary equal to the personal allowance threshold (£12,570 in 2026), which uses the personal allowance and triggers minimal tax, then top up with dividends. Even at this modest salary level, PAYE registration is required.

Register for PAYE via gov.uk. You will receive an Employer Reference Number and Accounts Office Reference. Modern payroll software (FreeAgent, Xero, Sage) files Real-Time Information (RTI) returns automatically each pay period.

Registration 4: Self Assessment for directors

Founder-directors who receive dividends from their company need to file a personal Self Assessment return each year. The dividends are reported, dividend tax is calculated against the dividend allowance and applicable rates, and any other personal income (interest, rental, etc.) is included.

Register for Self Assessment via gov.uk by 5 October following the end of the tax year in which you first received income that requires a return. The return itself is due by 31 January following the end of the tax year. Late notification, late filing, and late payment each carry their own penalties. We have a separate site dedicated to late tax returns if you find yourself behind.

The order to do them in

1. 1Wait for the Companies House Certificate of Incorporation.
2. 2Wait for HMRC's automatic UTR letter (typically 1 to 3 weeks after incorporation).
3. 3Register for corporation tax via the business tax account, within 3 months of starting to trade.
4. 4Register for PAYE before the first salary is paid (whether to founder or employee).
5. 5Register for VAT either now (voluntary) or when the threshold approaches (mandatory).
6. 6Register the founder-director(s) for Self Assessment by 5 October of the year of first dividends.

Common questions

When does "starting to trade" actually start?

When the company begins activity intended to generate profit. Signing a first commercial contract counts. Issuing a first invoice counts. Hiring an employee counts. Pure pre-trading R&D and capital-raising activity does not count, but the line is fact-specific. If in doubt, register early; HMRC does not penalise voluntary early registration.

Can I delay registrations to keep things simple?

No, and you should not want to. Late notification penalties on each of these registrations are non-trivial. The administrative burden of registration is small. The cost of delay is meaningful and grows the longer you wait.

Can my accountant handle all of this?

Yes. Most startup-specialist accountants handle the HMRC registrations as part of their formation package. Expect this to be included in fees of £500 to £1,500 for a clean formation.