How to Register as Self-Employed with HMRC

Do You Need to Register?

You must register as self-employed with HMRC if your self-employment income exceeds £1,000 in a tax year (this is the Trading Allowance). The UK tax year runs from 6 April to 5 April. If you earn less than £1,000 from self-employment, you may not need to register, but you should still keep records.

You will also need to register if you are a partner in a business partnership — though your nominated partner handles most of the HMRC administration.

How to Register — Step by Step

Step 1: Create a Government Gateway Account

Visit gov.uk/register-for-self-assessment and select "I am not self-employed" or "I want to file a tax return". You'll need to create a Government Gateway account if you don't already have one. You'll need your National Insurance number and proof of identity (passport or driving licence).

Step 2: Register as a Sole Trader

Select "Sole trader" as your business type and complete the online form. You'll need to provide: your name and address, your date of birth, your NI number, the date you started self-employment, and a brief description of your business.

Step 3: Receive Your UTR

HMRC will send your Unique Taxpayer Reference (UTR) — a 10-digit number — by post within approximately 10 working days. Keep this safe; you'll need it every time you file a return or contact HMRC.

Step 4: Set up your online account

Once you receive your UTR, activate your HMRC online account and enrol for Self Assessment online services. This is what you use to file your annual Self Assessment tax return.

Registration Deadline

You must register by 5 October following the end of the tax year in which you started self-employment. For example:

  • Started trading April 2025 → register by 5 October 2025
  • Started trading November 2025 → register by 5 October 2026

HMRC can charge a penalty of up to 100% of any tax due if you register late. Don't delay.

National Insurance for Sole Traders (2024/25)

Class 2 National Insurance was abolished from 6 April 2024 (Spring Budget 2024). Previously charged at £3.45/week, this was a significant saving for lower-earning sole traders.

Class 4 NI remains payable on your self-employment profits:

  • 8% on profits between £12,570 and £50,270
  • 2% on profits above £50,270

Class 4 NI is calculated and paid via your Self Assessment return — you do not need to set up a separate payment arrangement.

Income Tax as a Sole Trader (2024/25)

Your self-employment profits are added to any other income you receive and taxed via Income Tax:

  • Personal Allowance: £12,570 (frozen until at least 2028) — no tax on this amount
  • Basic rate: 20% on taxable income £12,571–£50,270
  • Higher rate: 40% on taxable income £50,271–£125,140
  • Additional rate: 45% above £125,140

Self Assessment Tax Return Deadlines

  • 31 October: Paper return deadline
  • 31 January: Online return deadline (and payment deadline for any tax owed)
  • 31 July: Second payment on account (if applicable)

In your first year, HMRC will typically ask you to pay your tax bill for the year plus a 50% "payment on account" towards next year's estimated bill, both by 31 January. This can catch first-year self-employed people by surprise — budget for it.

What Records Must You Keep?

HMRC requires you to keep business records for 5 years after the 31 January submission deadline for the relevant tax year. Records to keep include:

  • All sales invoices and receipts
  • All purchase receipts and expense records
  • Bank statements
  • Mileage records if you use a vehicle for business
  • Any grants or support payments received

HMRC is moving towards fully digital record-keeping — see our guide to Making Tax Digital for what this means for sole traders.

Allowable Business Expenses

As a sole trader, you can deduct allowable business expenses from your income before calculating your tax. Common allowable expenses include:

  • Office costs (stationery, postage, software)
  • Travel costs (fuel, parking, train fares — but not commuting to a regular workplace)
  • Clothing (uniforms or protective clothing — not everyday clothes)
  • Staff costs (if you employ people)
  • Business premises costs (rent, utilities — or a proportion if working from home)
  • Advertising and marketing
  • Professional fees (accountant, solicitor)

If you work from home, you can claim a proportion of your household bills as a business expense. HMRC publishes flat rates (£10–£26/month depending on hours worked) or you can claim the actual proportion of costs used for business.

Frequently Asked Questions

Register online at gov.uk/set-up-sole-trader through your Government Gateway account. You will need your National Insurance number and proof of identity. HMRC will send your Unique Taxpayer Reference (UTR) by post within approximately 10 working days.

You must register by 5 October following the end of the tax year in which you started self-employment. For example, if you started trading in April 2025, you must register by 5 October 2025. Late registration can result in penalties.

Class 2 National Insurance was abolished from April 2024. Self-employed people now pay only Class 4 NI: 8% on profits between £12,570 and £50,270, and 2% on profits above £50,270. This is calculated and paid via your Self Assessment return.

Your Unique Taxpayer Reference is a 10-digit number HMRC assigns when you register for Self Assessment. You need it every time you file a tax return or contact HMRC about your tax affairs. Keep it safe — it cannot be changed.

The online Self Assessment tax return deadline is 31 January following the end of the tax year (5 April). Paper returns are due 31 October. Tax owed is also due on 31 January. In your first year you may face two payment dates: 31 January (tax owed plus first payment on account) and 31 July (second payment on account).