Starting up legally in Britain is genuinely quick and cheap. Most of what stops people is not knowing the order to do things in.
Decide the structure first. Sole trader or limited company changes everything that follows — how you register, how you are taxed, and who is liable. See [types of business ownership].
Register. A sole trader registers for Self Assessment with HMRC. A limited company is incorporated at Companies House, which can be done online in a day for a modest fee, and you will need a registered office address, at least one director and details of the people with significant control.
Open a separate bank account. Legally required for a company, because the company's money is not yours. Strongly advisable for a sole trader anyway — mixing personal and business money makes the tax return miserable and the accounts unreliable.
Registering for VAT too early or too late. Registration is compulsory once taxable turnover passes the threshold on a rolling twelve-month basis, not a tax-year basis. Voluntary registration can make sense if your customers are VAT-registered businesses and can reclaim it, and is usually a mistake if you sell to the public.
Forgetting the payment on account. The first Self Assessment bill often includes an advance payment towards the next year, so the first January is far larger than people budget for.
Insurance. Employers' liability insurance is a legal requirement from the moment you employ anyone. Professional indemnity is contractually required by many clients.
Not checking the name. Check it at Companies House and check the trade mark register before you print anything.
The whole legal set-up can be done in an afternoon. It is the sequence and the deadlines that catch people, not the difficulty.
For a start-up case, the marks are usually in matching the structure to the risk and the finance available, not in listing registration steps.