How to Start an Electrician Business in the UK [Guide]

Going self-employed as an electrician isn’t just grabbing your toolkit and printing some business cards. There are registrations, qualifications, scheme memberships, insurance, pricing, marketing, and whatnot.

So, where do you even begin?

We’re here to help you make your first steps in starting your own electrician business.

Read on to learn how to start an electrician business so you can avoid rookie mistakes that burn new businesses.

Key takeaways

• Choose the right business structure.
  Starting as a sole trader is simple and low-cost, but your personal assets are at risk. A limited company offers limited liability, tax efficiency, and a more professional image.
• Get the right qualifications and registrations.
  You’ll need NVQ Level 3, pass the AM2 assessment, and be up to date with the 18th Edition Wiring Regulations.
• Proper accounting and tax management save time and stress
  Startup costs can range from £10,000 to £50,000, so planning finances carefully is crucial.
• Avoid rookie mistakes
  Don’t start without experience, underprice jobs, skip marketing, or take on too much too soon.
• ANNA makes launching easy
  ANNA lets you open a business account, register your company, manage invoicing, payroll, taxes, and filings in one place. Thus, it reduces admin, keeps your finances accurate, and lets you focus on getting jobs and growing your electrician business.

Why start an electrician business in the UK right now?

The UK’s electrical industry is booming. We’re talking around £36 billion in value, and it’s still growing. But more importantly, over the next few years, the UK expects to be short about 15,000 qualified electricians.

In other words, the demand is high, competition is lower than you’d think, and customers are actively looking for reliable electricians.

Also, electrical work isn’t getting simpler. With new building regulations, smart home tech, EV chargers, renewables, and heat pumps, people need properly certified professionals.

And when demand goes up? Rates follow.

Typical day rates range anywhere from £125 to £600, and if you specialise in commercial installs, industrial maintenance, or green tech, you can charge even more.

Between the push toward greener energy and a growing skills gap, starting an electrician business now is a solid long-term play.

Plenty of work, good pay, and room to grow. Not a bad time to get yourself in the game, right?

How to start an electrician business in 5 key steps?

Let’s take a look at the key steps you should follow to begin your electrician business properly.

1. Choose your business structure and get registered

Choosing a business structure for your electrician business greatly affects your tax liabilities, personal legal risks, administrative responsibilities, and growth opportunities.

Sole trader

This is the most common way electricians start, and for good reason. It’s simple, low-cost, and you can get up and running quickly.

As a sole trader, you are the business. You keep all the profits, but you’re also personally responsible for any debts or liabilities the business takes on. Thus, your personal assets are technically on the line.

Tax-wise, your profits are treated as your income. You’ll have to pay income tax and class 4 National Insurance (more about this later).

You also need to register with HMRC and submit a Self Assessment tax return each year.

This setup is ideal if you’re just getting started, planning to work solo, or taking on smaller local jobs.

Limited company

Going limited is a step up in structure and professionalism.

The big benefit here is limited liability, meaning that the business is its own legal entity. So, if something goes wrong financially, your personal assets are protected.

Your tax obligations are a bit different, too. Instead of paying income tax on all profits, the company pays corporation tax.

You can also pay yourself using a combination of salary and dividends, which is a popular way to save on tax.

Another factor to consider is the public image. A limited company tends to look more professional on paper. This can help you land bigger commercial contracts, housing jobs, and public sector work.

Also, if you ever want to bring in a partner, get financing, or sell the business, having a limited company makes the process much easier.

🔥 Thinking of running a limited company? ANNA makes it easy.

Open your business account and register your company in one go. We even cover the Companies House fee and take care of the admin stuff like VAT, PAYE, and Corporation Tax.

It’s all handled automatically, so you can focus on building your business.

2. Get the right qualifications and licenses

To work as an electrician in the UK, there are a few key qualifications you’ll need.

Mandatory qualifications

The big one is the NVQ (National Vocational Qualification) Level 3 Diploma in Electrical Installation, or an equivalent. This proves you’ve got the technical skills and training to work safely and professionally.

Once you’ve completed your NVQ, you’ll also need to pass the AM2 (Achievement Measurement 2) assessment. It’s a hands-on, practical exam that shows you can actually do the job to the required standard.

You’ll also need to be up to date with the 18th Edition Wiring Regulations (BS 7671). These regulations are the rulebook for how electrical installations should be carried out, so staying current is a must.

If you’re planning to specialise, there are extra qualifications to consider.

• For example, installing EV charging points typically requires a specific Level 3 Award, such as the City & Guilds 2921-34.
• If you’re planning to work with solar PV systems or battery storage, you’ll likely need additional training to meet certification scheme requirements, such as MCS (Microgeneration Certification Scheme).

Certifications

Once you’ve got your core qualifications in place, the next step is getting registered with a CPS (Competent Person Scheme).

This is what allows you to self-certify your own electrical work under Part P building regulations, rather than having to get the local council involved every time you finish a job.

The main schemes and associations to choose from are:

• NICEIC (National Inspection Council for Electrical Installation Contracting)
• NAPIT (National Association of Professional Inspectors and Testers)
• ECA (Electrical Contractors’ Association)

They essentially confirm that you’re qualified, working safely, and meeting national electrical standards. To join, you’ll need your NVQ Level 3, AM2.

Be aware that these schemes do carry out regular assessments or audits to make sure everything is up to scratch.

Many clients, especially commercial ones, will only hire electricians who are scheme-registered, as it reassures them of your professional competence.

3. Sort the insurance

Having the right insurance is crucial to protect yourself, your business, and your clients from financial risks tied to your work.

Here are the most common types of insurance:

3.1. Public Liability Insurance

This is your non-negotiable insurance. It protects you if someone is injured or if property gets damaged as a result of your work

For example, this insurance would protect you if you’re installing new wiring and accidentally cause damage to a client’s walls, or if someone gets hurt as a direct result of your work.

This policy helps cover legal costs and compensation.

Most electricians start with £1 million cover, but many go for £2 million or more, especially if you’re joining schemes like NICEIC, which often set minimum cover requirements.

3.2. Professional Indemnity Insurance

This covers you if a client claims that your advice, design work, or decisions ended up costing them money. It’s not about physical damage.

This insurance helps cover legal fees and compensation, protecting both your business finances and your reputation.

3.3. Employer’s Liability Insurance

If you hire anyone, whether they’re full-time, part-time, temporary, or even a labour-only subcontractor, this insurance becomes a legal requirement in the UK.

It covers you if an employee gets injured or becomes ill because of the work they’re doing for you.

Skipping this insurance isn’t worth the risk, as the fines for not having it can be over £2,500 per day.

It also gives you peace of mind that if something does happen, you’re covered for legal costs and compensation rather than having to pay it out of your own pocket.

3.4. Tools and equipment insurance

This type of insurance covers loss, theft, or damage to your tools and equipment that are vital for your day-to-day work.

It helps you replace expensive equipment quickly, so you’re not stuck on the sidelines when the unexpected happens.

3.5. Van insurance and hired-in plant insurance

If you rely on a van, this insurance covers damage, theft, or accidents involving the vehicle.

Hired-in plant insurance covers damage or loss to rented machinery or equipment used on job sites.

4. Plan your budget

Starting an electrician business in the UK comes with upfront costs. You should be looking at anywhere from around £10,000 up to £50,000, depending on how big you want to start.

These costs cover the essential things, such as:

• Getting registered,
• Buying tools and equipment,
• Sorting insurance, and
• Making sure you’re set up to work professionally and legally from day one.

5. Take care of taxes and contributions

Let’s take a closer look at taxes and contributions you should be aware of when starting your electrician business.

Income tax for sole traders

Sole traders pay income tax on business profits after deducting allowable expenses. The personal allowance (tax-free income) is £12,570 per year.

Income tax bands for England, Wales, and Northern Ireland are:

• Basic rate: 20% on income up to £37,700
• Higher rate: 40% on income between £37,701 and £125,140
• Additional rate: 45% on income above £125,140

In Scotland, rates are slightly different, with bands between 19% and 48%.

National Insurance Contributions (NICs) for sole traders

Class 2 NICs at a flat weekly rate: £3.45 per week for 2025/26.

Class 4 NICs at 6% on profits between £12,570 and £50,270, and 2% on profits above £50,270.

Corporation Tax for limited companies

Limited companies pay corporation tax on profits:

• 19% on profits up to £50,000
• 25% on profits above £250,000, with marginal relief in between

Directors and employees pay income tax and NICs on salaries drawn from the company.

Dividends paid to shareholders are taxed at:

• 8.75% (Basic rate)
• 33.75% (Higher rate)
• 39.35% (Additional rate)

Employer contributions

If you take on staff, you’ll need to pay Employer National Insurance Contributions (NICs).

You’ll also need to make sure you’re paying at least the minimum wage, which is £12.00 per hour for workers aged 21 and over. If you hire apprentices or younger workers, the minimum wage is lower.

📢 You’ll want to be on board for this:

Did you know that, from 2026, sole traders in the UK will be required to file their taxes digitally four times a year?

Here’s the thing, though: most accounting providers will try to steer you toward pricey software, which you then have to set up, learn, and manage on your own.

Not exactly what you want to spend your evenings doing.

That’s where ANNA makes life easier.

For your first year, we offer our Making Tax Digital service completely free. Yep, 100% free for 12 months.

Here’s what that actually means for you:

• No new software to figure out: We handle everything.
• No calculations or confusing forms: You just answer a few simple questions.
• No manual data entry: ANNA pulls your bank transactions, prepares your returns, and files them on your behalf.
• No surprise charges: The service is free for your first year.

8 common rookie mistakes to avoid

Before you flip the switch on your new business, make sure you avoid these common pitfalls.

• Jumping in without the right electrical qualifications or hands-on experience can land you in legal trouble and harm your reputation.
• Underestimating startup costs or quoting too low to win jobs can drain your cash flow and cause burnout.
• Operating without proper registration, insurance, or compliance with regulations can halt your business fast.
• Waiting for customers to appear without adequate marketing will slow your growth.
• Double bookings, missed client calls, or messy schedules affect trust and income.
• Ignoring quotes or not keeping in touch with clients can lead to missed opportunities and referrals.
• Taking on too many jobs or complicated projects too soon can impact the quality of your work and damage your reputation.
• Ignoring health and safety regulations puts you, your team, and your clients at risk.

How to start an electrician business easily with ANNA?

ANNA is your all-in-one business companion, handling money, invoicing, accounting, expenses, bookkeeping, and taxes so you can focus on running your business.

Here’s what ANNA does for you:

✨ Get started in a day: Open your business account and register your company. We even cover the Companies House fee.

✨ Pick the perfect name: Use our Free Name Checker, and if your first choice is taken, we’ll suggest similar options.Register a company in the UK

✨ Keep documents safe and organised: Everything you need is stored securely and easy to access.

✨ Books always in order: ANNA keeps your accounting accurate 24/7.

✨ Smart tax calculations: We figure out the most tax-efficient amounts you owe.

✨ Tax filing made easy: ANNA prepares and submits Corporation Tax, VAT returns, and Self Assessment directly to HMRC.

✨ Payroll handled: We manage PAYE for your team, so you don’t have to worry.

✨ Invoice automation: Create, send, and track invoices effortlessly.

✨ Year-end sorted: ANNA delivers financial statements and files your Confirmation Statements with Companies House.

Try ANNA today to start your electrician business stress-free and with no extra admin work weighing you down.

FAQ:

1. Can I be a self-employed electrician?

Yes, you can work as a self-employed electrician in the UK.

You’ll need the right qualifications, such as an NVQ Level 3 and the AM2 assessment, and you should register with a Competent Person Scheme, such as NICEIC or NAPIT, to self-certify your work.

You also need to register with HMRC, have the proper insurance, stay compliant with regulations, and manage your taxes correctly to run your business safely and legally.

2. Do all electricians need to be NICEIC registered?

No, not all electricians need to be registered with NICEIC.

However, being registered with a Competent Person Scheme, such as NICEIC, NAPIT, or ECA, allows you to self-certify your work under Part P regulations.

It is often required for certain jobs and preferred by many clients.

Registration also helps build trust, demonstrates compliance, and makes it easier to win commercial or public sector contracts.

3. Is it worth becoming an electrician in the UK?

Yes, becoming an electrician in the UK is worth considering.

The industry is growing, with high demand, a looming skills shortage, and competitive pay ranging from £125 to £600 per day, plus higher rates for specialised work.

With the right qualifications, certifications, and business setup, you can enjoy job security, good earning potential, and opportunities to grow.