How to start a consulting business in the UK

I found no licence and no required qualification for calling yourself a consultant in the UK. The only protected title I found on the government's register is "Chartered Management Consultant", which needs accreditation from the Chartered Management Institute.

That makes starting easy, and it makes being believed hard. So your first job isn't your logo. It's deciding what you'll be known for, and who already knows you can do it. I'd want two paying clients lined up, or at least six months' costs saved, before I resigned. That's my judgement, not a rule.

Step 1: Check what you can't do without authorisation

Calling yourself a consultant is free. Some of the work isn't. If your specialism touches any of these, get proper advice first.

If you plan to give tax advice or help form companies, ask an accountant if the money laundering rules apply to you. I didn't research that for this guide, so I won't summarise it.

Do you need a qualification?

No, but credentials can help a buyer who doesn't know you. The Institute of Consulting offers qualifications at Levels 5 and 7 through approved centres, and the Certified Management Consultant award. Chartered Management Consultant has a route for people running their own consultancy, with a written submission and a professional discussion.

My view: if you've 15 years in your field, get clients first. A credential won't fix a vague offer. It's more useful later, when you're bidding against larger names.

Step 2: Choose sole trader or limited company

I'd expect consultants to go limited early, because larger clients may ask for it. But the tax picture has moved. For 2026 to 2027, dividends above the £500 allowance are taxed at 10.75%, 35.75% or 39.35%. So don't assume a company saves tax. Get an accountant to run your numbers. That's a question for someone who can see them.

If you're going limited, verify your identity early. A company can't file its confirmation statement until all its directors are verified.

Step 3: Understand IR35 before your first contract

IR35 applies where you work through your own company, and you'd have been an employee if you'd worked for the client directly.

• For medium and large clients, the client usually decides your status.
• For a small client outside the public sector, your own company decides.
• A company counts as small if it meets two of: turnover up to £15 million, balance sheet up to £7.5 million, 50 employees or fewer, for accounting periods from 6 April 2025.

This catches ex-managers more than most. Leave a job on Friday and go back on Monday as a consultant to the same employer, with the same desk and the same boss, and I'd expect a problem. HMRC's CEST tool gives its view of a role. Use it, keep the result, and take advice on anything that looks like your old job. This is general information, not tax advice.

Step 4: Sort out tax

• Self Assessment: you can start before you register, but you must register if you earn over £1,000 in a tax year. Do it by 5 October after that tax year ends, so 5 October 2027 for a practice you start now.
• Making Tax Digital: sole traders need compatible software and quarterly updates once in scope. The test is gross income: over £50,000 from 6 April 2026, over £30,000 from 6 April 2027, and over £20,000 from 6 April 2028. The GOV.UK page covers sole traders and landlords, and doesn't mention limited companies.
• VAT: you must register if taxable turnover passes £90,000 in 12 months. At £733 a day, that's about 123 days. Ask your accountant if registering sooner would suit you.
• Records: keep them from day one, and open a separate bank account.

Step 5: Get insured

• Professional indemnity (PI): covers claims that your advice or work caused a client a loss. The pages I read don't describe it as a legal requirement, but it's the policy I'd buy first, and client contracts may ask for a set level.
• Public liability: for visiting client sites and running workshops.
• Employers' liability: needed once you employ someone, with at least £5 million of cover, and a £2,500 fine for each day without it. There's an exemption if you only employ a family member.
• Cyber cover: worth a look if you hold client data. I haven't priced it.

Costs are lower than most people expect. Simply Business, a broker, says 10% of consultants pay £91 or less a year, but that example left out PI. Its example with £1 million PI, £2 million public liability and equipment cover came to £368.44 a year for a sole trader. Indemnity, another broker, says £1 million of PI for a low-risk management consultant can start at £250 a year. Those are sales pages, and your field matters. Ask how the policy treats claims made after you stop trading, because advice can come back years later.

Step 6: Get your paperwork right

Consultants trade on words, so put yours in writing. A contract should cover:

• What you'll do, and what you won't.
• Fee, payment terms, deposit and expenses.
• Who owns what you produce.
• Confidentiality, both ways.
• A limit on your liability, which your insurer may want to see.
• How either side can end it.
• Data protection, if you'll handle personal data.

Have a solicitor write your template once. Even with nothing in writing, the law implies reasonable care and skill in England, Wales and Northern Ireland. Anything else you thought you'd agreed is harder to prove.

If your clients are individuals

Most consultants sell to businesses, so consumer law doesn't apply. A consumer means an individual acting mainly outside their trade or business. A sole trader buying for their business isn't one.

If you do sell to individuals, such as career clients, the Consumer Contracts Regulations 2013 may give them 14 days to cancel a contract made online or by phone. Tell them before they buy. If you don't, the period can run up to 12 months longer. Don't start inside the 14 days unless they expressly ask, and if they cancel after that, they pay a proportionate amount. New subscription rules also start on 1 January 2027 for consumer contracts. I couldn't confirm how they treat a monthly retainer, so take advice if you sell one to individuals.

Data protection

If you hold client contacts and personal data, you'll probably need to pay the ICO's data protection fee. GOV.UK gives £52 or £78 for most organisations. I couldn't open the ICO's own page, so use its self-assessment to check if you're exempt.

Step 7: Set up how clients reach you

This is the step I'd expect new consultants to skip. You'll be in a workshop when the first real enquiry rings, and it won't leave a message. That's close to literal: 6% of UK adults in a June 2026 YouGov survey for Answer4u said they'd leave a voicemail, and 37% would abandon the call within 60 seconds.

1. A separate business number, not your personal mobile.
2. A text that goes out by itself when you can't answer.
3. A LinkedIn profile that says who you help, and a free Google Business Profile.
4. A simple website with your offer, a case study and a way to book a call.
5. A routine for asking each client for a review when a project closes.

The wording's in our free templates.

Step 8: Find your first clients

1. Write a list of 50 people who've seen your work. Message them one by one.
2. Check your old employment contract before you approach old clients or colleagues. It may limit who you can contact, and that's easy to forget.
3. Tell accountants, solicitors and other advisers who serve your buyers what you do. In Scotland's 2024 to 2025 small business survey, 37% of SMEs that took advice went to an accountant.
4. Publish what you know, once a week.
5. Price properly from day one. Our fees guide shows you how.
6. Add directories if you've got gaps, once you've seen how they compare with referrals.

Your first 30 days

• Check whether any of your work is regulated.
• Choose your legal structure and register with HMRC.
• Open a separate bank account.
• Buy PI and public liability insurance.
• Get a contract template written.
• Get a business number, with missed calls texted back.
• Set up LinkedIn, your Google profile and accounting software.
• Check if you owe the ICO fee.

David Bell, founder of Real Business Systems

David helps small UK businesses get found, answer every enquiry and keep customers coming back. We sell some of the services mentioned here, and we say so where they come up.