How to start an IT consultancy in the UK

Updated 2026-07-03 • Last reviewed 2026-07-12

The quick answer: most people running an IT consultancy in the UK start as either a sole trader or a limited company, depending on your risk and income. Startup costs are very low, expertise-led with minimal equipment beyond what you already own. Registration can be entirely free, and the details below cover exactly what to sort, and in what order.

Step 1: Choose your business structure

Most people starting an IT consultancy go with either a sole trader or a limited company, depending on your risk and income. Don’t default to a limited company just because it sounds more serious, at modest income a sole trader is often simpler and cheaper once accountancy costs are factored in. Read our complete sole trader vs limited company guide and run your own numbers on the calculator before deciding.

Step 2: Register your business

Sole traders register directly with HMRC. If you’re incorporating, several providers, Tide, ANNA, Revolut and Wise, will register your limited company for free when you open a business account with them, saving you the Companies House filing fee and a separate step. See our full registration guide for the complete walkthrough, including what to have ready before you start.

Step 3: Open a business bank account

Keep business money separate from personal spending from your very first transaction. Several genuinely free accounts exist, so cost is never a good reason to skip this. See our best business bank accounts guide to find the one that actually fits how you’ll use it.

Step 4: Sort your accounting

Set up bookkeeping before your first invoice lands, not three months in once receipts have piled up. A genuinely free tool like Wave covers the basics well for a new, small business, with paid options like Xero or QuickBooks worth considering once things get more complex.

Step 5: Get the right insurance

For an IT consultancy, the cover that actually matters is:

• Professional indemnity insurance
• Cyber liability insurance

What actually goes wrong

A system you built or advised on fails, or a data breach happens on your watch, and a client holds you responsible for the financial fallout. Cyber liability cover specifically addresses this, and it's increasingly expected by clients handling sensitive data before they'll sign a contract.

Your first 90 days

Registration and setup are the easy part. The real test is the first 90 days: getting your first client or job, keeping accurate records from day one, and not letting admin become a way of delaying the actual work. Our UK startup checklist walks through exactly what to prioritise, week by week.

Related reading: Sole trader vs limited company

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