Last checked 19 October 2026
Quick answer
It depends on what you do. A freelance writer with a laptop and a builder buying a van and tools face very different start-up costs. The useful approach is to list every cost that applies to you: equipment, vehicle, insurance, any licences, premises, software, marketing, professional help and money set aside for tax. GOV.UK says you can start trading as a sole trader straight away, but you must register for Self Assessment if you earn more than £1,000 in a tax year.
This is general information, not legal or tax advice. Check GOV.UK or speak to a qualified adviser about your situation. Why we say this.
“How much do I need to get going?” is one of the first questions people ask when they think about working for themselves. We can’t give you a figure, because the honest answer varies hugely by trade. What we can give you is a checklist, so nothing catches you out.
Work through each section, note what applies, and get real quotes for each item. Prices change, so a quote from this month beats a figure you read online.
1. Setting up the business
GOV.UK’s Set up a business guide says most businesses register as a sole trader or limited company, and that a sole trader is the simplest structure to set up and keep records for. If you’re weighing the two, our guide to sole trader or limited company covers the differences.
GOV.UK’s Become a sole trader guide says you can start trading straight away without registering, but you must register for Self Assessment as a sole trader if you earn more than £1,000 in a tax year (6 April to 5 April). Our guide to registering as self-employed walks through it.
2. Tools, equipment and stock
For many trades, this is the biggest cost. List everything you need on day one, and separate it from what can wait.
- tools and equipment
- protective clothing and safety kit
- a laptop, tablet or phone that can run the apps you’ll use
- materials or stock to get started
Some of these costs may count as business expenses, and some equipment is treated differently for tax. Our guide to allowable expenses explains the basics, and an accountant can tell you how your purchases should be treated.
3. A vehicle
If you need a van or car for work, include the purchase or lease, insurance, fuel or charging, servicing and any parking. If you’ll drive into cities, check whether a clean air zone or ULEZ applies: our guide to Clean Air Zones for vans explains what to check.
4. Insurance
GOV.UK says sole traders have unlimited liability, meaning you’re personally responsible for all of the debts of the business. It says you may be able to get more protection with business insurance, and links to guidance from the Association of British Insurers. Get quotes for the cover your work needs, and check whether any customer, contractor or venue requires a particular type.
5. Licences and permits
GOV.UK says you may have other responsibilities depending on what your business does, and to check if you need licences or permits, for example to play music, sell food or trade in the street. Its licence finder is the place to check. Some licences have fees, so include them once you know what applies.
GOV.UK also notes you may need a criminal record check if you work with protected groups, such as children or vulnerable adults.
6. Premises
Working from home keeps costs down, but check your responsibilities: GOV.UK has guidance on running a business from home. If you rent a unit, shop or workshop, include rent, deposit, utilities and business rates. GOV.UK says small businesses can apply for a discount on business rates and some may pay nothing.
7. Software and admin
- Bookkeeping software. If you’ll need to use Making Tax Digital for Income Tax, HMRC says you’ll need compatible software. Its guidance says free products are available for people with simple tax affairs, but they may have limits. Our guide to bookkeeping software covers what to look for.
- A business bank account. Not always required, but it can make records simpler. Our guide to a separate business bank account explains the pros and cons, including fees.
- Payment tools. Card readers and payment links usually involve fees. Our guide to taking card payments explains the options.
- Data protection. GOV.UK’s Data protection and your business guide says you must tell the data protection regulator, the Information Commission (still known as the ICO), how your business uses personal information, and links to an ICO self-assessment to check if you need to pay the data protection fee.
8. Marketing
A name, a logo, a simple website or online listing, business cards and van signs all cost something, though some options cost little or nothing. Our guide to setting up a Google Business Profile explains one way to get found locally. Decide who you’re trying to reach before you spend: our guide to getting your first customers can help.
9. Professional help
You might want an accountant, a bookkeeper or other advice when you start. Get a clear quote for what’s included. Our guide to using an accountant or doing it yourself covers how to decide.
10. Money for tax and quiet weeks
This isn’t a start-up cost, but it catches many people out. GOV.UK says HMRC works out whether you need to pay Income Tax and National Insurance based on your profits when you submit your Self Assessment tax return. Our guide to how much tax to set aside explains the basics. It’s also wise to keep some money back for slow weeks, late payers and repairs.
If your turnover grows, VAT may come into play. GOV.UK says you need to register for VAT if you meet the requirements: see our guide to the VAT registration threshold.
Putting it together
A simple spreadsheet works well: one column for each cost, one for whether it’s one-off or ongoing, and one for the quote you’ve got. Ongoing costs matter as much as start-up costs, because they come out of every month’s income.
If you’re looking at finance to cover start-up costs, GOV.UK has a finance and support finder. We don’t cover funding here. Free advice services can help you check your plan: our guide to free business support lists them.
Frequently asked questions
Does it cost anything to register as a sole trader?
You register as a sole trader by registering for Self Assessment with HMRC. GOV.UK’s guidance on registering doesn’t list a fee. The bigger risk is registering late: GOV.UK says you may get a penalty.
Can I start trading before I’ve bought everything?
GOV.UK says you can start trading straight away. Many people start with the essentials and add equipment as work comes in.
Can I claim my start-up costs against tax?
Some costs may be allowable. The rules depend on what you bought and when, so ask an accountant.
Do I need a business bank account before I start?
GOV.UK says you might be able to use a personal or business bank account for your business, and to check with your bank which type you can use.
Sources
All checked on 19 October 2026.
- Set up a business (GOV.UK)
- Become a sole trader (GOV.UK)
- Choose the right software for Making Tax Digital for Income Tax (GOV.UK, HMRC)
- Data protection and your business (GOV.UK)
- Business records if you’re self-employed (GOV.UK)
- Finance and support for your business (GOV.UK)
Where to check
What changed. : . 28 October 2026: First published.
