How to register as a sole trader with HMRC: a step-by-step guide

If you are earning money from self-employment in the UK, you have to tell HMRC. Registering as a sole trader is the process for doing that. It is free, takes about 15 minutes online, and unlocks your Self Assessment tax return each year.

Here is exactly how to do it.

When do I need to register as a sole trader?

You must register with HMRC by 5 October in your business's second tax year. In practice that means:

• If you started trading between 6 April 2025 and 5 April 2026, you must register by 5 October 2026.
• If you started earlier, you should have registered already - do it now, penalties for late registration escalate quickly.

You need to register once your income from self-employment is more than £1,000 in a tax year. Below that, the trading allowance covers you and you do not need to declare it.

What you need before you start

Have these to hand:

• Your National Insurance number.
• The date you started trading (the date of your first invoice or your first client work, not the date you thought about it).
• A business name if you use one - otherwise your own name is fine.
• The type of work you do (a short description, not a formal category).
• Your address, phone number and email.
• A Government Gateway user ID. If you do not have one, you will create it during registration.

How to register: step-by-step

1. Go to gov.uk/register-for-self-assessment. Choose the "self-employed" option.
2. Sign in with your Government Gateway ID or create a new one. HMRC will email a confirmation code as part of setup.
3. Fill in the online form with your personal details, business start date, business name (if any) and what you do.
4. Submit. HMRC will process the registration and send you a Unique Taxpayer Reference (UTR) by post within 10 working days.
5. Set up an activation code for your online account. This arrives separately, again by post, within a further 7 to 10 days. You will need it to file returns.
6. File your first Self Assessment return by 31 January after the end of your first tax year of trading.

You do not need to register for VAT unless your turnover crosses £90,000 in a rolling 12-month window.

After you register: what happens next

• HMRC will expect a Self Assessment tax return every year, by 31 January online.
• You will be treated as self-employed for National Insurance and automatically enrolled for Class 4 NIC. See how much tax a sole trader actually pays.
• If you cross £50,000 of combined self-employment and rental income, you will be in scope for Making Tax Digital for Income Tax from April 2026.
• You should start keeping proper records from day one: invoices, receipts, mileage, and business bank statements.

Common mistakes

• Waiting too long. The 5 October deadline is easy to miss because it does not feel urgent. Missing it means a late notification penalty and interest on any tax owed.
• Using a personal Gateway ID for a limited company later. If you incorporate later, the company needs its own login. Do not muddle the two.
• Not opening a separate business bank account. Not legally required, but it makes bookkeeping and tax time significantly easier.
• Forgetting to keep receipts. Anything you want to claim as an expense needs a record. See allowable expenses for UK sole traders.

If you would rather not do it yourself

We register clients, set up their accounting software and handle Self Assessment as part of ongoing support. If you would like us to take it off your plate, get in touch or read more about our self assessment service.