How to register as self-employed

Self-employment is on the rise in the UK, with 4.39 million people starting a business this way as of Q3 2025.

To register as self-employed in the UK, you must notify HMRC via the GOV.UK portal by October 5th in your business’s second tax year to avoid penalties.

It also means that you are responsible for handling your own tax, National Insurance and student loan payments, plus keeping track of your expenses.

If you’re considering making the switch to self-employment, it’s important to understand how this works with HMRC and what will be expected from you.

In this article, we’ll explore how and when to register a self-employed business, what to do if you’ve gone down the limited company route (and incorporation with Companies House), and next steps once your registration is complete.

Do I need to register as self-employed?

You are legally required to register for Self Assessment if your self-employment income exceeds £1,000 in a tax year (April 6 to April 5).

You’re likely to be classed as self-employed if:

• You run your business operations and plan the overall strategies 
• You have customers who pay you for your services
• You decide how often and when you work

When do I need to register as self-employed?

You’ll need to register as self-employed as soon as you decide that’s the direction you want to go in. The next step will then be to submit your working status to HMRC, the UK’s tax authority, ready for your self-assessment.

Self-assessment refers to HMRC’s system of collecting income tax – you should register for self-assessment and Class 2 National Insurance payments by no later than the 5th October in the second tax year of your business operating. 

For example, if you started working as self-employed on 1st February 2025, you would need to register as self-employed with HMRC by 5th October 2026. If you don’t, you could be fined – and of course, that’s not ideal.

Other ways to register

If registering as self-employed online isn’t convenient for you, you can also do this via post and phone:

• To register via phone, call HMRC’s self-employed helpline on 0300 200 3310 and be ready with personal details like your business name and address, National Insurance number and previous tax information.
• To register via post, download a SA1 form from HMRC’s website. Complete it and post it to the address detailed on the form.

Financial requirements as a self-employed business

Once registered as self-employed, it’s important to keep track of all the invoices you’ve issued to customers, as well as any business-related expenses. This information is crucial to completing your self-assessment tax returns accurately.

The deadline for sending a self-assessment tax return online is 31st January every year. When the form mentions ‘payments on account’, these are payments that are made towards your next tax bill and help spread the cost of your tax by making payments in two instalments – each payment is half of the tax you owed last year. These payments are due by midnight on 31st January and 31st July.

If you struggle to make the payment owed in one lump sum, you can contact HMRC directly to set up a payment plan.

Should I register as a sole trader or a limited company?

When becoming self-employed, you should consider whether you want to operate as a sole trader, in a partnership, or as a limited company. Let’s look at what each of these means.

Sole trader

A sole trader is what it says on the tin – they’re the sole owner of the business and don’t have any employees. This is the simplest type of self-employment and is easy to set up, but also has unlimited liability as sole traders aren’t viewed as a separate entity by UK law. This means that if the business gets into debt, the business owner is personally liable.

In a partnership

Being self-employed as a partnership is the description given to two or more people agreeing to join in a business venture together with a view to making a profit. In most cases, all partners own the business equally and are responsible for any profits or liabilities on an equal basis.

This structure means that the owners don’t have the traditional director and shareholder roles in the same way that limited companies do. However, every partner is liable for the partnership debts.

Limited company

A limited company is a type of self-employed business structure with its own legal identity. Separate from its owners (shareholders) and managers (directors), it is governed by UK company law. A limited company has limited liability, meaning that, unlike sole traders and partnerships, it is a legal entity separate from both its shareholders and directors.

Such businesses are more complicated to set up and run, often requiring specialist advice from external parties like solicitors, and one major downside is that this can be expensive. Limited companies must be incorporated at Companies House, the public registry, and must file their accounts annually.

Can I register as self-employed while working a full-time job?

You can register for self-employment even if you’re working a full-time job. Running a side hustle or “moonlighting” outside of your regular job is completely legal and many people do it, but you must still register and declare any income you earn.

Income from your full-time job is usually taxed automatically through the Pay As You Earn (PAYE) scheme. Your employer deducts income tax and National Insurance from your salary before you’re paid, using your tax code. You don’t need to take any action here, as HMRC receives the information directly from your employer.

When earning money from a side hustle or self-employment, you are responsible for declaring this income yourself. This income is reported through your self-assessment tax return, where you declare your earnings and deduct any allowable business expenses.

For tax purposes, your self-employed profits are added to your PAYE salary to work out your total taxable income for the year. Income tax is then charged at the usual UK rates (20%, 40%, or 45%), depending on your total income.

Taking the leap

Becoming self-employed is a huge, yet exciting, step in a person’s career, and once you understand how to register as self-employed, you can focus on running your business and staying on top of your tax responsibilities.

Having a clear understanding of what is involved and the expectations from HMRC is important, but once you know this, it’s a simple process to become registered.

Remember, you must file a tax return every January and be sure to keep an accurate log of all invoices and expenses to help you fill this out – although time-consuming, it’s much easier to do this throughout the year than to dig out all of your bank statements and fill them out in one go.

For more advice on being self-employed, check out our guide to essential workers’ rights contractors.