How to Register as a Sole Trader in the UK

How to register as a sole trader in the UK

Registering as a sole trader means telling HMRC you are working for yourself and need to pay tax through Self Assessment. It is free, it takes about 15 minutes online, and you do not need Companies House. This guide covers who needs to register, the deadline, and what happens next.

Do you need to register?

You must register as self-employed if your income from self-employment is more than £1,000 in a tax year. This is the trading allowance: earn £1,000 or less from self-employment in a year and you do not need to tell HMRC about that income or file a Self Assessment return for it.

The £1,000 limit applies to your total self-employed income, including freelance work, side income and contract work outside PAYE. If you earn more than £1,000, you must register even if self-employment is only a part-time side hustle alongside a job.

When to register

You must register for Self Assessment by 5 October following the end of the tax year in which you started trading. For example, if you started self-employment at any point between 6 April 2026 and 5 April 2027, you must register by 5 October 2027.

Do not wait until the deadline. Registering early gives HMRC time to send your Unique Taxpayer Reference (UTR) and gives you more time to get your bookkeeping in order before your first tax return is due. Missing the deadline can lead to a penalty if it causes you to file or pay late.

How to register as a sole trader

1. Gather the details HMRC will ask for

Before you start, have these ready:

• Your National Insurance number
• The date you started trading
• Your business name, if you use one
• Your contact details, including an email address and phone number

2. Register online with HMRC

Register through the official GOV.UK service for Self Assessment. If you do not already have a Government Gateway user ID, you will create one as part of the process — keep the ID and password somewhere safe, as you will need them every year to file your return.

You can also register by post using form CWF1, but the online route is quicker.

3. Wait for your Unique Taxpayer Reference

After you register, HMRC gives you a ten-digit Unique Taxpayer Reference (UTR). If you registered online, your UTR appears in your personal tax account within 72 hours. You will use this number every year to file your Self Assessment return, and for things like applying for a mortgage as a self-employed person.

What happens after you register?

Once registered, you pay tax on your profits — your income minus allowable business expenses — not on your total income. You report this through Self Assessment each year. Your online tax return is normally due by 31 January following the end of the tax year, and any tax due is usually payable on the same date. For example, if you started trading in August 2026, your first return covers the year ending 5 April 2027 and is due online by 31 January 2028.

Keep records from day one: sales and income, receipts and invoices, business expenses, and any VAT records if you are VAT registered. Good records make filing far easier and help you claim the expenses you are entitled to.

Do you need to register for VAT?

You only have to register for VAT if your taxable turnover exceeds £90,000 in a 12-month period. Below that, registering is voluntary — some sole traders do it so they can reclaim VAT on business purchases, but it also means charging VAT to customers and filing VAT returns.

Making Tax Digital

From April 2026, self-employed people with income over £50,000 must keep digital records and send regular updates to HMRC under Making Tax Digital for Income Tax. If your income is below that level, the requirement does not apply yet, but keeping digital records from the start makes the transition easier.

Sole trader or limited company?

As a sole trader you are the business: there is no legal separation between you and your work, so your personal assets are at risk if the business runs into debt. A limited company is a separate legal entity, which protects your personal assets but brings more admin and filing duties. Many people start as sole traders and switch to a limited company later as profits grow. A separate business bank account is not legally required for a sole trader, but it makes managing money and filing your tax return much easier.

Frequently asked questions

How much does it cost to register as a sole trader?
Nothing. Registering with HMRC is completely free. Your only costs are running the business itself, such as insurance or professional advice.

Can I register as a sole trader if I am employed?
Yes. You can be employed and self-employed at the same time. Your employment income is taxed through PAYE, and your self-employed profits are taxed through Self Assessment.

What if I earn less than £1,000?
If your gross self-employed income is £1,000 or less in a tax year, the trading allowance may mean you do not need to register. There are exceptions, so check the GOV.UK guidance if you are unsure.