How to Start a Trade Business in the UK 2026

ByTradeStack HQ

Starting a trade business in the UK is one of the most achievable paths to self-employment available. If you have a skill – plumbing, electrical work, joinery, decorating, tiling, heating – you already have the foundation. What you need is a clear plan for turning that skill into a properly run business. This guide walks you through exactly how, from registering with HMRC and getting the right insurance to pricing your work, finding your first customers, and setting up the systems that will keep everything running smoothly.

Step 1: Decide on Your Business Structure

For most tradespeople starting out, there are two main options:

Sole trader – the simplest structure. You operate as an individual, register with HMRC as self-employed, and complete a Self Assessment tax return each year. You keep all the profits but you’re personally liable for any business debts. The vast majority of tradespeople starting out operate as sole traders.

Limited company – a separate legal entity. More complex to set up and administer, but offers limited liability protection and can be more tax-efficient once you’re earning above a certain threshold. Most tradespeople move to a limited company structure once their earnings reach around £30,000–£40,000 per year. Speak to an accountant about when it makes sense for your situation.

For most people reading this guide, starting as a sole trader is the right move. It’s quick, simple, and costs nothing to set up.

Step 2: Register With HMRC

As a sole trader, you must register with HMRC as self-employed. Do it as soon as you start trading – don’t wait for the legal deadline. The process takes around 15 minutes online at gov.uk and costs nothing. You’ll need your National Insurance number. HMRC will send you your Unique Taxpayer Reference (UTR) number within 10 working days, which you’ll need to file your annual Self Assessment tax return by 31st January each year. For a full walkthrough see our guide on how to register as self-employed as a tradesperson.

Step 3: Get the Right Insurance

Before you take on your first job, get insurance in place. Operating without it exposes you to significant financial risk, and many customers won’t hire you without proof of cover.

  • Public liability insurance – essential for every tradesperson. Covers you if a customer or member of the public is injured or their property is damaged as a result of your work. From around £50–£100 per year for lower-risk trades
  • Tools insurance – covers the cost of replacing your tools if stolen, lost, or damaged
  • Van insurance – make sure your policy covers business use; standard personal policies typically don’t
  • Employers liability insurance – a legal requirement if you take on any staff, even a casual labourer for a day

Step 4: Get Any Required Certifications

Depending on your trade, you may need specific certifications before you can legally carry out certain work:

  • Electrical work – registration with a competent person scheme (NICEIC or NAPIT) is required for notifiable work in England and Wales
  • Gas work – Gas Safe registration is a legal requirement. It is illegal to work on gas appliances without it
  • General building – no mandatory certification, but FMB membership, TrustMark registration, and CSCS cards are widely expected on many sites

Check the requirements for your specific trade before taking on work. Operating without required certifications is illegal in some cases and can invalidate your insurance in others.

Step 5: Set Up Your Business Finances

  • Open a dedicated business bank account – keep business and personal finances completely separate from the start. Starling Bank offers a free business account that’s excellent for sole traders
  • Start using accounting software immediately – Xero or QuickBooks connects to your bank account, categorises transactions automatically, and makes Self Assessment significantly less painful
  • Set aside 25–30% of every payment for tax – transfer it to a separate savings account the moment payment arrives. The first tax bill is the biggest shock for new sole traders; build the habit from your very first invoice
  • Register for VAT when needed – once your taxable turnover exceeds £90,000 in a 12-month period, VAT registration is mandatory. Below that, speak to an accountant about whether voluntary registration makes sense

Step 6: Sort Your Pricing

Undercharging is one of the fastest ways to run a struggling business. Your pricing needs to cover your labour, materials (at cost plus markup), overheads (van, insurance, tools, software, fuel), tax and National Insurance, and a profit margin above your personal drawings. Research what other tradespeople in your area charge for similar work – price competitively but don’t undercut to the point where you’re not making a proper living. Customers who choose purely on price are rarely the best customers to work for.

Step 7: Get Your First Customers

  • Tell everyone you know – word of mouth is still the most powerful marketing tool in the trades. Your first several jobs will almost certainly come from people you know or their connections
  • Set up a Google Business Profile – free and puts you on Google Maps and in local search results. Read our guide on how to set up a Google Business Profile for your trade business
  • List on Checkatrade or Rated People – connects you directly with homeowners actively looking to hire while your organic presence builds
  • Get your first reviews – ask every customer to leave a Google review. Even five or six reviews early on gives you credibility that converts future enquiries
  • Create a Facebook business page – post before and after photos. Join local community groups and respond to requests for tradesperson recommendations

Step 8: Set Up Your Job Management System

When you’re just starting out, managing in your head or on a notepad might seem fine. But as your business grows, that approach breaks down fast – missed follow-ups, forgotten invoices, and unprofessional quotes cost you money and reputation. Setting up a proper job management system from day one means you build good habits early and never have to unpick a chaotic system later. Tradify handles quoting, job scheduling, invoicing, and payment chasing all from your phone, and is simple enough to use from site from your first week.

Try Tradify Free – No Card Required

Step 9: Build Your Reputation

In the trades, your reputation is everything. The businesses that grow fastest aren’t always the most skilled – they’re the ones who show up on time, communicate clearly, do what they said they would, and follow up after the job.

  • Always show up on time, or call ahead if you’re going to be late
  • Send professional quotes promptly – ideally the same day as the assessment
  • Keep customers updated on job progress
  • Leave the work area clean and tidy
  • Follow up after every job to make sure the customer is happy
  • Ask for a Google review from every satisfied customer

Most tradespeople don’t do all of these consistently. The ones who do stand out immediately and generate significantly more referrals and repeat work.

The Bottom Line

Starting a trade business in the UK is genuinely achievable – and for skilled tradespeople, it can be extremely rewarding both financially and in terms of independence. The key steps are simple: register with HMRC, get your insurance in place, sort your pricing, start telling people you’re open for business, and set up the systems that will keep everything running smoothly as you grow. The tradespeople who succeed aren’t necessarily the most technically skilled – they’re the ones who run their business professionally from day one.

Try Tradify Free – No Card Required

Frequently Asked Questions

How do I start a trade business in the UK?

The essential steps: decide on your business structure (most start as sole traders); register with HMRC as self-employed at gov.uk; get public liability insurance, tools insurance, and the right van insurance; obtain any required trade certifications (Gas Safe for gas work, competent person scheme for electrical work); open a dedicated business bank account; set up accounting software; sort your pricing; and get your first customers through word of mouth, Google Business Profile, and trade directories. It takes a few days to get set up and costs very little to start.

Should I start as a sole trader or limited company?

Start as a sole trader unless you have specific reasons not to. The sole trader structure is simpler to set up (no Companies House registration, simpler accounting), costs nothing, and works well at lower income levels. Most accountants suggest it’s worth considering a limited company once you’re consistently earning £30,000–£40,000 or more per year after expenses – at that point, paying yourself a combination of salary and dividends can be more tax-efficient. Speak to an accountant who works with trade businesses before making the switch.

What insurance do I need to start a trade business?

At minimum, every tradesperson needs public liability insurance – this covers injury or property damage to customers or third parties resulting from your work. Most customers will ask to see your certificate before you start. You should also have tools insurance to cover theft or damage to your equipment, and van insurance that specifically covers business use (standard personal policies often don’t). If you take on any staff, employers liability insurance is a legal requirement, not optional. Compare quotes at Simply Business or Superscript.

How do I get my first customers as a new tradesperson?

Your first customers will almost always come through people you know – tell everyone in your network that you’ve gone self-employed and ask them to spread the word. In parallel: set up a Google Business Profile immediately (free and generates local search visibility); list on Checkatrade or Rated People to generate paid leads while your organic presence builds; ask every completed job for a Google review; and create a Facebook business page posting before and after photos of your work. Within 2–3 months of consistent effort, these channels compound and reduce your reliance on any single source.

What certifications do I need to start a trade business?

It depends on your trade. Gas engineers must be Gas Safe registered – working on gas appliances without this is illegal. Electricians carrying out notifiable work in England and Wales must be registered with a competent person scheme such as NICEIC or NAPIT. General builders, decorators, joiners, and plumbers have no mandatory certifications for most residential work, but CSCS cards are expected on many construction sites, and industry body membership (FMB, CIPHE) adds credibility. Always check the specific requirements for your trade and location before starting work.

How do I price my work as a new tradesperson?

Price from the bottom up: calculate your minimum day rate using the formula (annual business costs + gross profit needed to achieve your target take-home) ÷ chargeable working days (approximately 220/year). This gives you a floor below which you can’t charge without losing money. Then research local competitor rates to understand the market ceiling. Price within that range based on your experience and the quality of your work – not at the cheapest end just to win jobs. Add a materials markup of 10–20% and always itemise labour and materials separately in quotes.

TradeStack HQ helps UK tradespeople find the best tools to run smarter businesses. Some links on this page are affiliate links; we may earn a commission if you sign up, at no extra cost to you.

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