How Much Does it Cost to Start a Business in the UK? [Detailed Calculation]

7 May, 2025 · 8 min read

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Discover how much does it cost to start a business in the UK and get smart tips to plan your budget and avoid common financial pitfalls.

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8 cost types you should prep for
What’s the verdict: How much are the typical startup costs?
🎁 Bonus: 10 most cost-effective ways to start a business in the UK
Let’s recap
Starting a UK business doesn’t have to break the bank – Here’s how ANNA Money helps

So, you want to start a business in the UK in 2025? Brilliant!

But before you start brainstorming quirky brand names, there's one slightly less glamorous thing to tackle: the budget.

Starting a business isn't just about passion and great ideas, it's also about pounds and pence and knowing what you’re in for financially.

We’re here to help by breaking down the real costs of launching a UK business with a few tips to help you start smart.

Let’s dive into the digits.

8 cost types you should prep for

Let’s start with the key cost types you’ll need to get your business up and running.

1. Company registration

Registering a business with Companies House is relatively inexpensive. You’ll have to pay £50 if you apply online and £15 for the Certificates of incorporation sent via post.

Fees differ depending on the type of your business:

Limited liability partnership (LLP) incorporation and registration fees range between £50 and £71, and £78 for the same-day incorporation.
Limited partnership (LP) incorporation fees cost £71, available only in hard copy.
Private fund limited partnership (LP) incorporation fees include designation as a private fund LP (after the LP has been registered) and cost £10.
Overseas company incorporation and registration fees cost £71, available only in hard copy.

Sole traders and partnerships generally have lower registration and compliance costs than limited companies.

2. Business bank account

If you start a limited business, having a bank account with one of the UK banks is a must.

While some UK banks offer free business accounts for a limited time, the monthly fee price range can vary significantly, as you can see in the table above. ☝

3. Professional Fees

These fees cover accounting and financial advice, insurance, licences, and legal costs.

Again, your business type will affect the overall amount.

One of the first services you should think about is accounting.

Not only can this service help you crunch the numbers, but it can also help with the essential tasks like filing annual returns and managing staff payroll, keeping your business legally compliant and financially on track.

Here are some general ranges:

💡Note: Did you know that with ANNA +Taxes subscription, you cover everything for 24 pounds a month?

If you’re a sole trader, you need to consider income tax and National Insurance (more about National Insurance later).

Check the tax rates in each band if you have a standard Personal Allowance of £12,570.

💡 Worth knowing

Did you know that you can take care of company registration, banking, and accounting services under one roof with ANNA Money?

You can register a Limited Company and open a business account with ANNA at the same time.

Plus, you can register an eCommerce business for free and open a business account that integrates with Shopify, WooCommerce, Etsy, eBay, and Amazon.

And if you're in a rush? ANNA's got you.

Submit your application by 3pm, and you can have your limited company registered with Companies House and your business account ready by the end of the day.

Yup, all within a single day.

In fact, you could be up and running with a business account in under 10 minutes, and your expense card will be on its way, landing in your postbox in just 3 – 4 days.

And there’s more rolling out.

Our +Taxes feature handles all essential taxes for small businesses, so you don’t have to.

In addition, we’ll take care of your VAT registration paperwork and submit the HMRC application on your behalf.

4. Company name registration

The initial company registration fee, which ranges from £50 to £78, includes the cost of registering your business name.

However, if you want to change the company’s name, the fees range from £20-£30. In addition, if you want the same-day change of name, the fee is £83.

Besides the name registration, you may want to consider trademarking your name.

It is an optional step, but it will give you exclusive rights, preventing others from copying or using your brand/name.

A registered trademark isn’t just protection but an asset. If you ever decide to sell your business, your trademark can boost its overall value.

You can apply online through the UK Intellectual Property Office (UK IPO) with the initial cost of £170 to register one trade mark in one class.

For each additional class, the cost is £50.

A hefty overall amount, but the trademark is valid for 10 years, after which you can renew it.

💡 Worth knowing

Already have a name in mind for your business? Before you get too attached, give it a quick check with ANNA Money’s business name generator.

Not only does it check if your name is taken, but it’ll even throw out some clever alternatives if someone’s beaten you to it. 😎

5. Office or workspace costs

To launch a business in the UK, you’ll need to register a business address, whether it's as a limited company with Companies House or as a sole trader through HMRC.

There are a few options here:

1. Traditional office space

You can rent a physical office space for £700–£1,500/month per desk in Central London.

Of course, the more outside the centre you go, the cheaper the prices. Another contributing factor is the city or region where you’ll have your office.

2. Virtual office address

Virtual office addresses enable you to get a virtual office in a prestigious location for a reasonable price.

You can use them for official correspondence, marketing, and registration purposes.

For London, charges are between £15 and £50 per month for a basic package.

Source: Statista

Besides great cost-saving qualities, virtual addresses offer flexibility since you can easily upgrade or downgrade services.

ANNA Money enables you to get a prime UK address to boost your company’s image and keep your personal address private.

The service also includes the same-day mail scanning & forwarding for all business and governmental correspondence that you can easily check via your ANNA Money account.

6. Staffing

Hiring employees or contractors adds to payroll, benefits, and training costs.

Again, the cost of hiring varies with the level of expertise required and whether you use freelancers or full-time staff.

Bringing someone on board isn’t just about paying their salary. As an employer in the UK, you’re also responsible for things like:

PAYE (Pay As You Earn) — Deducting and submitting Income Tax and National Insurance contributions on your employee’s behalf.
Employer National Insurance Contributions — Currently 15% on earnings above the threshold.

Pension Contributions — Enrolling eligible employees in a workplace pension and contributing at least 3% to their plan.

Worth knowing

Meet ANNA Payroll – your no-fuss, HMRC-recognised sidekick for all things salary. It takes the hassle out of payday by:

Automatically calculating employee pension contributions and including them when you file to HMRC.
Automatically creating P45 and P60 documents and keeping them safe and secure in your ANNA document storage.
Adding up to 5 employees to your monthly payroll filing and creating payslips in no time.

The best part? You don’t even need an ANNA business account to use ANNA Payroll. But if you do have one (smart move 😉), we’ll go ahead and automatically create draft payments for your team right after every filing.

It’s like payroll, which does the legwork for you.

And here's the cherry on top: for the first 3 months, it’s just £3/month, less than your coffee habit. After that, it’s £20/month + VAT, still a steal for stress-free salary days.

7. Equipment

If your company needs specialised equipment, machinery, or technology, it can drive costs up.

With so many variables, pinning down an exact number is tricky.

That said, small businesses typically spend anywhere from £8,312 to £103,906 on equipment.

But if you're a solo entrepreneur with minimal needs, your setup might cost just a few hundred pounds.

8. Marketing & Branding

Initial costs include website development, branding, and marketing campaigns.

Digital marketing is increasingly dominant, and tools like a logo maker can help establish brand identity early on, but costs can range from a few hundred to tens of thousands of pounds, depending on the scope.

What’s the verdict: How much are the typical startup costs?

It goes without saying that pinning down the exact amount is almost impossible since there are many variables based on your business type and overall needs.

Still, let’s take a look at estimated industry variations:

Creative/Tech Startups — Can start with as little as £1,000 or less.
Consultancy/Transport/Events — Typically require £1,000–£5,000.
Food/Property — £5,000–£10,000.
Finance/Recruitment — Often exceeds £10,000.
Retail/Health/Leisure — £1,000–£10,000+, depending on scale.

🎁 Bonus: 10 most cost-effective ways to start a business in the UK

Starting a business in the UK can be very affordable if you choose the right structure, business model, and strategies.

Here’s how:

Let’s recap

Starting a business in the UK isn’t exactly pocket change, but it doesn’t have to be an impossible mountain of expenses.

From setting up shop to hiring help, the costs can vary wildly depending on how lean (or luxe) you go.

The key is planning smart, spending wisely, and keeping your cash flow calm and collected.

That’s where tools like ANNA Money come in handy, helping with everything from registering your company to handling invoicing, payroll, and even tax filing.

It’s like having a business admin genie, without the 3-wish limit.