How to register as self-employed

As of August 2024, there were over 4.2 million self-employed people in the UK. Launching a business in this way can offer greater flexibility, and means you can pick and choose the jobs you’d like to take on – but 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 to register a self-employed business, when to do so and what to do if you’ve gone down the limited company route (and incorporation with Companies House), and what to do once your registration is complete. Don’t worry – it’s not too tricky…and best of all, you’ll only have to do it once!

Do I need to register as self-employed?

You will need to register as self-employed if you earn over £1,000 in a tax year. This is a low threshold, so it’s probably best to register as self-employed as soon as you begin earning money – you don’t have to, but it’s better to  before your business really kicks off and you have less time for the all-important admin jobs.

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

• You run your business operations and plan the overall strategies 
• You have customers that 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 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.

How do I register as self-employed?

Registering as being self-employed with HMRC can feel a scary and overwhelming step, but it’s really quite easy. Follow the below steps and you’ll be ready to go in no time.

Step 1: make a Government Gateway account

On the gov.uk website, set yourself up with a Government Gateway account – this will become your login details for your self-assessment. You’ll need to then enter your email address, and then you’ll be sent a user ID so you can complete the next steps.

Step 2: complete your registration

Once you receive your user ID, sign in and complete the form to register as self-employed. You will need to add personal details and know key business details to do this, like , the date you started trading, and the type of work you’ll be doing. 

Step 3: get your UTR number

Once the form has been completed, you’ll just  need to wait to receive a letter in the post from HMRC. This letter will have your 10-digit Unique Taxpayer Reference (UTR) number. Keep this safe and jot it down in a few places for safe keeping – you’ll need it to complete yourself-assessment tax returns. 

Congratulations – you’re officially self-employed!

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.

Check out the below video from HMRC for tips on how to fill out your self-assessment tax return

Sole trader, in a partnership or 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 mean.

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 most simple 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.

Taking the leap

Becoming self-employed is a huge, yet exciting, step in a person’s career. 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 and the self-employed should know.