GOV.UK’s guidance on how to register as a sole trader confirms that you become a sole trader by registering for Self Assessment and that anyone who needs to file a first return must tell HMRC by 5 October. Registering late, or not at all, can lead to a penalty.
Do You Need to Register as Self-Employed?
You need to register as self-employed if your gross income from self-employment is more than £1,000 in a tax year, which runs from 6 April to 5 April. “Gross” means before expenses. You should also register if you need to prove you are self-employed, want to pay voluntary Class 2 National Insurance, or work as a CIS subcontractor.
The £1,000 figure is the trading allowance. HMRC’s guidance on tax-free allowances explains that it is measured on gross income. If your trading income is £1,000 or less, you may not need to tell HMRC, unless one of the exceptions below applies.
You may need to register for self-assessment if you:
- Earn more than £1,000 gross from self-employment in a tax year
- Need to prove you are self-employed, for example, to claim Tax-Free Childcare
- Want to pay voluntary Class 2 National Insurance to protect your State Pension record
- Have made a loss and want to claim relief on a tax return
- Want to claim Maternity Allowance based on your self-employment
- Need to register as a subcontractor under the Construction Industry Scheme
Having a job does not stop you from registering. If you work for an employer and also run a side business, the self-employed profits are reported separately through self-assessment. Our Self Assessment tax return guide explains what happens once you are registered and it is time to file.
How Does HMRC Decide Whether You Are Self-Employed?
HMRC looks at how you actually work, not just what you call yourself. You are probably running a business if you take responsibility for its success or failure, have several customers at once, decide how, where and when you work, and can hire help at your own expense. Charging a fixed price for your work also points that way.
These tests come from GOV.UK’s guidance on working for yourself, which adds that you are likely to be trading if you sell regularly for profit, make items to sell, or are paid for a service. If you are not sure whether you are trading, HMRC advises contacting it for advice.
Running a limited company is different. A company director is not a sole trader even if they own the whole company. A limited company is a separate legal entity. A sole trader runs a business personally. If you trade through a company, our limited company accountant service covers the company’s own filings.
A director may need to file a personal self-assessment return, but being a director alone does not automatically require one. It depends on their income and circumstances—for example, dividends, rental income, or other untaxed income. Someone receiving only a salary taxed correctly through PAYE may not need one.
What Is the Deadline to Register as Self-Employed?
The deadline is 5 October following the end of the tax year in which you started self-employment. The tax year runs from 6 April to 5 April. If you started trading in August 2025, that falls in 2025/26, so your registration deadline was 5 October 2026. You do not have to wait: you can register as soon as you start trading.
HMRC’s self-assessment registration guidance says the same. Anyone who needs to complete a return for the tax year that ended on 5 April 2026 and has not sent a return before had to tell HMRC by 5 October 2026. Telling HMRC after that date could lead to a penalty.
| When you started trading | Tax year | Register by |
|---|---|---|
| 6 April 2025 to 5 April 2026 | 2025/26 | 5 October 2026 |
| 6 April 2026 to 5 April 2027 | 2026/27 | 5 October 2027 |
| 6 April 2027 to 5 April 2028 | 2027/28 | 5 October 2028 |
How Do You Register for Self-Employed Status in the UK, Step by Step?
Register online through GOV.UK in six steps: check if you need to file, gather your details, sign in or create HMRC sign-in details, register as a sole trader for Self Assessment, wait for your UTR, then start keeping records. You will need your National Insurance number. If you cannot register online, you can post form CWF1 instead.
HMRC’s step-by-step guide to setting up as a sole trader follows the same order, from choosing a business name to planning for your tax bill. Registering as a sole trader also registers you for Class 2 National Insurance, so one sign-up covers both.
- Check if you need to send a return. Use HMRC’s online checker before you start. It takes a few minutes and tells you whether self-assessment applies.
- Gather your details. You need a National Insurance number to register. If you do not have one, you can apply for a National Insurance number first. Have your start date and the type of work you do ready too.
- Sign in or create sign-in details. HMRC accepts a Government Gateway user ID or GOV.UK One Login. If you have never used HMRC online services, choose “Create new sign-in details” on the HMRC sign-in page guidance.
- Register as a sole trader. Choose the self-employed option and say you have not sent a return before. If you cannot use the online service, print and post form CWF1 to HMRC.
- Wait for your UTR. HMRC usually posts it within 15 working days, or 21 days if you live abroad. You may see it sooner in the HMRC app.
- Start keeping records. Record every sale and business cost from your first day of trading, even before your UTR arrives.
What Is a UTR and How Long Does It Take to Arrive?
A UTR, or Unique Taxpayer Reference, is a 10-digit number HMRC gives you when you register for self-assessment. It usually arrives by post around 15 working days after you register, and longer if you live overseas. You need it to file your return, so keep it somewhere safe.
GOV.UK’s guide to finding your UTR says sole traders can find it in their personal tax account, in the HMRC app, or in documents from HMRC such as a notice to file a return. If it has not arrived, you can check when to expect a reply from HMRC.
What Happens If You Miss the 5 October Registration Deadline?
Register as soon as you can. HMRC will then write to confirm when your return is due, which for registrations after 5 October 2026 is 31 January 2027 or three months from the date on its letter, whichever is later. You may get a failure to notify penalty if you also do not pay your tax bill in full by 31 January.
HMRC’s penalties guidance explains that this penalty is based on the amount of tax still left to pay and that you receive it within 12 months of HMRC getting your return. Late filing and late payment penalties are separate, so filing and paying on time still matters.
For the full calendar, see our guide to every self-assessment date and penalty. If you have just missed 5 October, register this week rather than waiting for the next deadline to pass.
What Tax and National Insurance Will You Pay After You Register?
You pay income tax on profits above your £12,570 personal allowance, plus Class 4 National Insurance if profits are over £12,570. For 2026/27, Class 4 is 6% on profits from £12,570 up to £50,270 and 2% above that. Most people pay Class 2 and Class 4 through self-assessment.
These figures come from GOV.UK’s self-employed National Insurance rates and income tax rates pages for the 2026 to 2027 tax year. Income tax is 20% on taxable income from £12,571 to £50,270, 40% up to £125,140, and 45% above that. Scotland has different bands.
| Your annual profits | Class 2 National Insurance | Class 4 National Insurance |
|---|---|---|
| Under £7,105 | Nothing to pay. You can pay voluntarily at £3.65 a week | None |
| £7,105 to £12,570 | Treated as paid | None |
| £12,571 to £50,270 | Treated as paid | 6% on profits over £12,570 |
| Over £50,270 | Treated as paid | 6% up to £50,270, then 2% above |
National Insurance is based on profits, not turnover. You work out your profit by deducting your allowable business expenses from your income, which is why good records can lower both your income tax and your National Insurance.
What Records Do You Need to Keep as a Self-Employed Person?
You must keep records of your business income and expenses for your self-assessment tax return, plus records of your personal income. Keep them for at least five years after the 31 January submission deadline for the relevant tax year. Accurate records let you work out your true profit and claim every expense you are entitled to.
HMRC’s business records guidance says you can record income and expenses by tax year, from 6 April to 5 April. It also explains how long to keep your records, and that cash basis is now the default method for most sole traders, meaning you record money when it is received or paid.
Many new sole traders hand this job to a bookkeeper from the start. Our bookkeeping services keep your records tidy in cloud software so your return is quick to prepare.
Can You Trade Under a Business Name?
Yes. You can trade under your own name or choose a different business name. The name must not include words such as “limited,” “Ltd,” “LLP,” or “PLC,” must not be offensive, and must not be too similar to another company’s trademark. You must show your own name and your business name on invoices and letters.
These are the rules in HMRC’s guidance on choosing your business name. The trade mark point matters because you may have to change your name if someone complains, so run a GOV.UK trade mark search before you print anything.
Will Making Tax Digital for Income Tax Affect You After You Register?
Not necessarily straight away. Making Tax Digital for Income Tax applies once your qualifying income passes a threshold: over £50,000 for 2024/25 from 6 April 2026, over £30,000 for 2025/26 from 6 April 2027, and over £20,000 for 2026/27 from 6 April 2028. You must submit a self-assessment tax return before you start using it.
That timetable comes from HMRC’s guidance on who needs to use Making Tax Digital for Income Tax. HMRC reviews your return each tax year and writes to you if you are above the threshold, but if no letter arrives, it is still your responsibility to check.
If you expect your income to grow quickly, it pays to keep digital records from day one. Our sole trader accounts service includes Making Tax Digital readiness, so you are not caught out later.
Common Mistakes When You Register as Self-Employed
- Waiting until you owe tax. The test is gross income over £1,000, not profit.
- Confusing registering with filing. Registering tells HMRC you exist, but you still file a self-employed tax return every year.
- Forgetting to register again as a sole trader when you already have a self-assessment record for another reason, such as rental income.
- Leaving it to the last week. Your UTR can take around 15 working days to arrive.
- Choosing a business name that includes “Ltd” or “Limited.”
- Not keeping records from your first day of trading.
Should You Register Yourself or Use an Accountant?
You can register yourself for free, and for a simple one-person business, it is a manageable job. An accountant is worth considering if you have more than one income source, are also employed, want help claiming the right expenses, or want someone to handle your filing and Making Tax Digital updates once you are registered.
If you decide to hire help, HMRC’s guidance on how to choose a tax agent is a useful checklist. Check that any adviser is registered with HMRC as an agent and that their fees are clear before you sign up.
At Fair Accountants, we register new sole traders with HMRC for self-assessment, secure your UTR and check your National Insurance position. We then look after your bookkeeping and return for a fixed monthly fee. Book a free consultation, and we will get you registered properly from day one.
Key Takeaways
- You register as self-employed by registering for Self Assessment with HMRC. It is free and done online.
- Register if your gross self-employed income is over £1,000 in a tax year, or if you need to prove self-employment.
- The deadline is 5 October after the end of the tax year in which you started trading. For 2025/26, that was 5 October 2026.
- You need a National Insurance number and a Government Gateway or GOV.UK One Login account.
- Your UTR usually arrives by post in about 15 working days.
- Class 4 National Insurance is 6% on profits from £12,570 to £50,270 and 2% above that for 2026/27.
- Keep business records for at least five years after the 31 January submission deadline.
- If you register late, do it now and pay any tax by 31 January to reduce penalty risk.
Frequently Asked Questions
Do I need to register as self-employed if I earn under £1,000?
Usually not. If your gross trading income is £1,000 or less, the trading allowance means you may not need to tell HMRC. You must still register if you want to pay voluntary Class 2 National Insurance, claim a loss, or prove you are self-employed.
How much does it cost to register as self-employed?
Nothing. Registering with HMRC for self-assessment is free. You only pay if you choose to hire an accountant or bookkeeper to do it for you.
Can I register as self-employed if I already have a job?
Yes. You can be employed and self-employed at the same time. Your wages are taxed through PAYE, and your self-employed profits are reported separately through self-assessment once you register.
How long does it take to get my UTR?
HMRC usually posts your UTR within about 15 working days, or 21 days if you live abroad. You may be able to see it sooner in your personal tax account or the HMRC app.
Do I need to register every year?
No. You register once. After that, you file a self-assessment return each year. If you registered before but did not need to file for a year, you may need to reactivate your account.
What if I cannot register online?
You can print and post form CWF1 to HMRC instead. Have all your information ready first, because you cannot save a partly completed form.
What is the difference between self-employed and a sole trader?
In practice, they mean the same thing for tax. You register as a sole trader by registering for self-assessment. A limited company is a separate legal entity, and its director is not a sole trader for the company’s income.
Do I need an accountant to register as self-employed?
No, you can register yourself. An accountant helps if your affairs are more complex, if you want expenses claimed correctly, or if you want filing and Making Tax Digital handled for you.
Need Help Registering as Self-Employed?
Registering with HMRC is free, but getting the timing, National Insurance and record-keeping right from day one is what keeps you clear of penalties later. Fair Accountants registers new sole traders for Self Assessment, secures your UTR and then looks after your sole trader accounts for a fixed monthly fee.
Book a free consultation or call 0203 488 6622 and we will get you registered properly.
