How to open a shop in the UK

Opening a shop in the UK takes more than finding a unit and filling it with stock. You need to register a business and secure premises you are allowed to trade from. You also need the licences that apply to what you sell, a way to take payments, and somewhere to bank your takings.

This article walks through those steps in the order most owners meet them.

This article is an overview of what to think about, not a full account of the rules. What applies to you depends on what you sell, where you trade and how you set the business up, so check the official source for anything that affects your plans.

For advice on your specific situation, speak to a qualified accountant, solicitor or professional adviser.

Key takeaways

• Most shop owners trade as a sole trader or a limited company. Other structures, such as partnerships, are also available.
• Whether you need planning permission depends on what the building was last used for. Many high street uses can change to a shop without an application in England.
• If you sell food, you must register with your local council at least 28 days before you open. Registration is free.
• You must hold employers' liability insurance from the day you take on your first employee.
• A limited company's money is legally separate from yours, so in practice the shop will need a bank account in the company name.
• Zempler Bank is an authorised UK bank, that provides business current accounts to retail businesses including shops, market stalls and online sellers.

What do you need to open a shop in the UK?

To open a shop in the UK you need a registered business and premises you have permission to trade from. You also need the right licences, insurance, a way to take card and cash payments, and somewhere to keep the business money. Most owners work through those steps in roughly the order below.

1. Decide what you will sell and who will buy it
2. Write a short business plan and work out your numbers
3. Choose your business structure
4. Register the business with Companies House
5. Register (as a limited company or sole trader) with HMRC for tax purposes
6. Find premises and check you are allowed to trade from them
7. Sort your licences, registrations and insurance
8. Open a business bank account
9. Set up your till, card payments and stock system
10. Fit out the shop and order your opening stock
11. Register for the taxes that apply and set up your records

The order matters in a few places. You will usually need your company registration number before you can open a business account. Open the account before you start paying suppliers.

How much does it cost to open a shop?

Costs sit across such a wide range that a single average figure would mislead you. A market stall selling one product line and a fitted-out convenience store on a high street face very different bills. Location, size, sector and how much of the fit-out you do yourself change the total more than anything else.

A more useful approach is to budget by category. Price each line against real quotes for your own unit, your own area and your own stock.

One-off costs to set up

These are the costs you meet once, before you open the doors.

• Business registration. Companies House charges £100 to register a limited company online or you can register for free with Zempler Bank’s formation service.
• Premises. Rent deposit, rent in advance, solicitor's fees, surveyor's fees and any agent's fees
• Fit-out. Flooring, lighting, shelving, counter, changing rooms, storage and decoration
• Shopfront. Signage, window graphics, security shutters and any consent you need for them.
• Equipment. Till or EPOS system (EPOS means electronic point of sale, a till that also tracks stock and sales), card reader, security and CCTV, and refrigeration if you sell chilled goods
• Opening stock. Your first orders, which you usually pay for before you have taken any money
• Licences and registrations. These depend on what you sell and where you trade
• Insurance. Your first premium or deposit
• Branding and launch. Logo, website, packaging and any opening promotion
• Professional fees. Accountant set-up, and legal advice on the lease

Ongoing costs to run the shop

These recur every month, whether or not you have a good week.

• Rent and service charge
• Business rates
• Utilities, broadband, waste collection and cleaning
• Stock replenishment
• Wages, employer National Insurance and pension contributions
• Card processing and banking costs
• Insurance premiums
• Accounting software or an accountant
• Repairs, maintenance and consumables such as bags and receipt rolls
• Marketing and loyalty schemes

Two costs catch new owners out. The first is stock, because you pay for it before you sell it, so money leaves the business weeks ahead of money arriving. The second is the gap between signing a lease and opening the doors, when rent, rates and utilities run while you have no takings. Build both into your cashflow plan rather than treating them as surprises.

Should you trade as a sole trader or a limited company?

Sole trader and limited company are the two structures most shop owners choose. They differ in how you register, how you are taxed and who carries responsibility for the debts.

As a sole trader, you and the business are the same legal entity. You register with HMRC for Self Assessment and pay Income Tax on your profits. You are personally responsible for the shop's debts, including the lease.

A limited company is a separate legal entity. You register it at Companies House, it pays Corporation Tax on its profits, and its money is legally separate from yours. That separation is why, in practice, a company will need an account in its own name rather than a personal one.

Which structure suits you depends on your individual circumstances; expected profit, whether you plan to bring in partners or investment, and how much risk sits in your lease and stock commitments. The tax position also shifts as profits grow, so the answer that fits in year one may not fit in year three. This is the general position and other factors can apply, so treat it as a starting point for a conversation with an accountant.

For advice on your specific situation, speak to a qualified accountant, solicitor or licensed adviser.

How to register your shop as a business

What you register depends on the structure you picked.

Registering as a sole trader

• Register for Self Assessment with HMRC. You need to do this by 5 October after the end of the tax year you started trading in. So if you open in June 2026, you register by 5 October 2027
• Keep records of your sales and expenses from your first day of trading
• You can trade under your own name or a business name. A sole trader business name is not registered at Companies House, though rules still apply to what you can call the business, and the name is not protected unless you register a trade mark

Registering a limited company

• Check your chosen name is available on the Companies House register
• Register online. Companies House charges £100 for standard online incorporation or you can register for free with Zempler Bank’s formation service
• You need a company name, a registered office address and at least one director and shareholder
• You also need to register as an employer with HMRC and run PAYE if you employ anyone. That includes paying yourself a salary as a director.

Zempler Bank is a Companies House authorised formation agent. Its company formation service lets you register your limited company and apply for a business account in one process rather than two. You still pay the £100 Companies House fee, but if you load £100 into the business bank account within the first 30 days we’ll reward you with £100 meaning your company registration is free.

Finding premises and checking you can trade from them

The unit you pick decides your rent, your rates and a good share of your footfall. It also decides how long it takes to open, because permissions and fit-out both run from the day you get the keys.

Do you need planning permission to open a shop?

Planning permission depends on the use class the building currently sits in, rather than on the fact that you are opening a shop. In England, many high street uses sit in the same class, including shops, offices, cafes and gyms, and moving between them does not usually need an application. Moving in from a pub, a home or a warehouse is more likely to need permission. Use classes work differently in Scotland, Wales and Northern Ireland. Signage and shopfront alterations can need separate consent, and listed buildings and conservation areas add another layer. Check the planning rules and speak to your local planning authority before you sign anything.

Rules vary by unit, by council and by country. Confirm the position for the specific property before you commit to it.

What to check in a commercial lease

• How long the lease runs, and whether there is a break clause. A break clause lets you end the lease early on set dates
• When the rent can be reviewed, and how the new rent is worked out
• Whether you have the right to stay on at the end of the term, or whether the lease removes that right
• What you have to repair, and what you will owe for dilapidations. Dilapidations are the cost of putting the unit back into the condition the lease requires when you leave
• The service charge, and what it pays for
• Any rent-free or reduced-rent period while you fit out
• Who pays the business rates, the buildings insurance and the utilities
• The permitted use clause, which sets out what you are allowed to sell from the unit
• Whether you can pass the lease to someone else if you need to move on
• Whether the landlord wants a personal guarantee. That means you pay personally if the business cannot

Commercial leases are long contracts with long tails. Have a solicitor read yours before you sign. Scottish leases work differently from those in England and Wales, so use a solicitor who practises in the country where the shop sits.

What licences, registrations and insurance does a shop need?

What applies to you depends on what you sell, where you trade and whether you employ anyone. Your local council is the first place to check, because several of these are issued locally and the detail varies by area. The list below covers the ones that come up most often. Others may apply depending on what you sell.

Licences and registrations

• Food. If you sell food or drink, including pre-packed items, a deli counter or a bakery counter, you must register as a food business with your local council at least 28 days before you open.
• Registration is free. Some businesses handling meat, fish or dairy need approval rather than registration, which is a different process. Your local council will tell you which applies
• Alcohol. Selling alcohol needs a premises licence from the council. You also need a named person in charge of alcohol sales, called the designated premises supervisor, who holds a personal licence. Licensing law differs in Scotland and Northern Ireland
• Street trading. Trading from a stall, a pavement pitch or a van usually needs a street trading licence or consent from the council. The name and the rules vary by area, and they also differ between countries in the UK
• Music. Playing recorded music or the radio where customers can hear it usually needs a music licence from PPL PRS
• Age-restricted goods. Tobacco, vapes, knives, fireworks and lottery tickets each carry their own rules, and some require registration. Some nations operate a register for tobacco and vape retailers, so check the rules for the country you trade in
• Data protection. If you keep customer details, run CCTV or operate a loyalty scheme, check whether you need to pay the data protection fee to the Information Commissioner's Office

Insurance

You must hold employers' liability insurance from the day you take on your first employee. The law sets a minimum cover level of £5 million, and you can be fined for each day you trade without it. A small number of businesses are exempt, and the rules on family members and single-employee companies are specific. Check your position before you decide you do not need cover.

Most other cover is not required by law, though there are exceptions, such as motor insurance if you use a vehicle for the business. Your lease or your suppliers may also require cover. Shop owners commonly hold:

• Public liability, for injury or damage to customers and their property
• Stock and contents cover, including damage and theft
• Business interruption cover, for lost trade after a flood, fire or break-in
• Product liability, if you make or import what you sell

Insurers often set conditions on locks, alarms and CCTV. Read those conditions before you fit out, because retrofitting security to meet a policy costs more than building it in. What you need depends on your premises, your staff and your stock, so a broker or insurer is the right place to confirm it.

How to open a business bank account for your shop

If your shop is a limited company, its money is legally separate from yours, so in practice you will need an account in the company name. Sole traders can use a personal account, though most personal bank account terms prohibit business use, and a separate account makes bookkeeping and tax returns simpler.

Have these ready before you apply:

• Proof of identity and address for every director and anyone with significant control over the company
• Your company registration number, or your own details if you trade as a sole trader
• The address you trade from, and your registered office address if you have one
•  A short description of what the shop sells and what you expect to turn over
• Your tax residency information and tax identification number (TIN)

When you compare accounts, five questions matter most to a shop:

• How quickly the account opens
• Whether you can pay cash in, and where
• The monthly fee, and how many payments are included before charges apply
• Whether it connects to your accounting software
• How you reach a person when something goes wrong

Opening an account with Zempler Bank

Zempler Bank offers a business account built for retail, aimed at independent shops. Zempler Bank considers applications from start-ups and businesses with limited trading history. You can apply online in minutes. Once approved, you receive a sort code and account number, so you can start using the account within 24hrs. Your card follows in three to five working days.

Two features tend to matter most for a shop. You can pay cash in at any UK Post Office branch, and there are more than 11,500 of them. That means you do not need a bank branch near your unit. The account also connects to Xero, QuickBooks, Sage and FreeAgent through Open Banking, so your takings feed into your books without rekeying.

Pots let you set money aside for VAT, rent and stock orders as the takings come in. That helps when a large supplier payment and a rent date land in the same week.

Cashflow tracking sorts your takings and costs into categories you set yourself. For a shop, that makes the seasonal pattern visible, so you can see which months carry the year and which ones you need to plan around.

Eligible deposits are protected by the Financial Services Compensation Scheme up to £120,000. If something goes wrong, you can speak to Zempler Bank's UK-based customer service team of real people. Zempler Bank accepts applications from limited companies, sole traders, partnerships and charities, though some industries are not eligible. Eligibility criteria apply, and Zempler Bank runs identity, fraud and anti-money laundering checks on every application. Fees and features are shown on our pricing page.

Taking card payments and banking your cash takings

Card payments run through a payments provider, which then settles the money into your business bank account. Settlement times vary between providers, so check before you sign. You will need a card machine or a till that accepts cards, and an agreement with the provider.

Zempler Bank business customers can also take contactless payments through the Zempler Bank app, using a feature called Tap to Pay. The phone acts as the payment terminal, so you do not need a separate card reader. That suits a market stall, a pop-up or a second till on a busy Saturday.

For more on choosing a provider, see how to take card payments in a shop. For the hardware, see how to choose a card machine for a small shop.

Cash still matters in most shops, particularly for low-value purchases and older customers. Bank it often rather than letting it build up in the till or the safe. Insurance policies often cap how much cash you can hold on the premises. Paying in at a Post Office branch lets you bank takings on the way home rather than driving to a bank branch during trading hours.

Tax, VAT and business rates

Thresholds and reliefs change, and they differ across the four UK nations. Check the current position on GOV.UK before you rely on any figure here.

When do you need to register for VAT?

You must register for VAT once your taxable turnover goes above £90,000 in any rolling 12-month period. You must also register if you expect to go above it in the next 30 days on its own. The 12 months is a rolling period rather than your tax year, so check the running total at the end of each month. You can also register voluntarily below the threshold. If you go over the threshold temporarily, you may be able to apply for an exception, and HMRC sets out how that works.

VAT-registered businesses keep digital records and file returns using compatible software under Making Tax Digital. Zero-rated sales still count towards the threshold. These are sales taxed at 0%, which covers many basic food items though not everything, since confectionery, soft drinks and hot food are usually taxed at the standard rate. You charge no VAT on them, but the turnover still counts.

Zempler Bank business accounts include a free Making Tax Digital tool for VAT, so returns can be filed from the account rather than through separate software.

Business rates

Most shops pay business rates on their premises. Small business rates relief can reduce or remove the bill for smaller properties. You usually have to apply for it rather than receive it automatically. The rules and the reliefs differ across England, Scotland, Wales and Northern Ireland.

For how the relief works and how to apply, see small business rates relief.

Records

Keep every receipt, invoice, till reading and bank statement from day one. Accounting software that links to your business account saves a lot of work at year end. It also makes the VAT threshold easy to monitor rather than something you discover late.

Your first weeks of trading

The opening weeks tell you more about the business than any forecast will. A short checklist keeps the admin from slipping.

• Check your card payments settle into the right account, and note how long settlement takes
• Bank your cash takings on a regular pattern rather than when you remember
• Do a stock take at the end of the first month, so you learn what actually sells
• Track your rolling 12-month turnover against the VAT threshold
• Set money aside for rates, VAT and your next stock order as the takings come in
• Confirm your insurance is live and that you meet its security conditions
• Record your opening hours somewhere customers can find them, including your Google Business Profile
• Review your supplier terms once you have a few weeks of sales data

Next steps

Decide your business structure, register the business, and open a retail business account. That keeps the shop's money separate from your own, starting with your first sale.