If you’ve started earning money on your own, whether that’s freelancing, selling online or picking up a trade, you need to register as self-employed with HMRC by 5 October following the end of the tax year you started trading. It’s free, takes about 20 minutes online, and it’s the only way HMRC can issue you a Unique Taxpayer Reference (UTR) so you can file your tax return. This guide walks through the whole process, step by step, including who’s actually exempt.
Do I need to register as self-employed?
You need to register if you earn more than £1,000 in gross income from self-employment in a tax year. This £1,000 figure is called the trading allowance, and it applies to your total income before expenses, not your profit.
Below that threshold, HMRC doesn’t require you to register or file a return for that income. So if you sold £600 worth of crafts on Etsy last year, you’re in the clear. Earn £1,200, and you need to register even if your actual profit after materials was only £150.
There are a few other situations where registration is required regardless of the trading allowance:
- You’re a partner in a business partnership
- You need to pay Capital Gains Tax
- You earn income from renting out property
- You need to repay Child Benefit through the High Income Child Benefit Charge
- You have untaxed income from savings, investments or dividends above HMRC’s thresholds
The 5 October registration deadline, explained
This is the deadline most new sole traders miss, mainly because everyone talks about the 31 January tax return deadline and forgets there’s an earlier one for registering in the first place.
The rule: you must register by 5 October following the end of the tax year in which you started trading or first went over the £1,000 threshold. The UK tax year runs from 6 April to 5 April.
So if you started trading at any point between 6 April 2025 and 5 April 2026, your registration deadline is 5 October 2026. It doesn’t matter whether you started on day one of the tax year or in March, right near the end; the same 5 October cut-off applies.
A couple of worked examples make this clearer:
- Started freelancing in June 2025 (2025/26 tax year) → register by 5 October 2026
- Started a small business in January 2026 (still 2025/26 tax year) → register by 5 October 2026
- Started trading in April 2026 (2026/27 tax year) → register by 5 October 2027
Registering as soon as you start trading, rather than waiting until close to the deadline, gives HMRC time to post your UTR and gets you set up before the filing rush.
How to register as self-employed: step-by-step
Step 1: Set up a Government Gateway account
Everything runs through your Government Gateway account, so this is the first thing you’ll need if you don’t already have one. Go to gov.uk/register-for-self-assessment and select “Register if you’re self-employed.”
You’ll be asked to create a Government Gateway user ID using your email address, then verify your identity. HMRC typically asks for your National Insurance number and one form of ID, such as a passport or driving licence, plus recent payslips or a P60 if you have them.
Keep your Government Gateway login details somewhere safe. You’ll use this same account every year to file your Self Assessment return, and to sign up for Making Tax Digital when it applies to you.
Step 2: Complete the SA1 registration
Once you’re through the Government Gateway sign-up, you’ll fill in the actual registration form (form SA1 if you’re doing it on paper, though most people complete it online in the same flow). You’ll need:
- Your full name, date of birth and current address
- Your National Insurance number
- The date you started self-employment
- A description of your business activity, for example “freelance graphic designer” or “self-employed plumber”
- Your contact details, including a phone number and email
If you can’t find your National Insurance number, you can look it up in the HMRC app or on your Personal Tax Account before you start, according to GOV.UK.
Step 3: Wait for your Unique Taxpayer Reference (UTR)
After you submit the registration, HMRC posts your UTR to your registered address. This is a 10-digit number that identifies you for tax purposes, and you’ll need it every time you file a return or contact HMRC about your tax affairs. It usually arrives within about 10 working days, though it can take longer during busy periods close to the October deadline.
Keep the letter somewhere you won’t lose it. You can’t change your UTR once it’s issued, and it stays with you for life, even if you stop trading and start again years later.
Step 4: Activate your account and enrol for Self Assessment online
Once your UTR arrives, you’ll get an activation code by post to finish setting up online access. Enter this into your Government Gateway account, and you’re fully enrolled for Self Assessment. From here on, you’ll file your annual tax return through the same login.
What if you’re already registered from a previous business?
If you’ve filed a Self Assessment return before, for example if you were self-employed a few years ago and then went back into full-time employment, you may already have a UTR from that period. You don’t need to register again from scratch. Instead, you can reactivate your existing record by contacting HMRC or, in some cases, notifying them online that you’ve resumed self-employment.
Trying to register as a brand new sole trader when you already have a UTR can create duplicate records and cause delays, so it’s worth checking your old paperwork or calling HMRC first if you’re not sure.
Class 2 and Class 4 National Insurance for the self-employed
National Insurance for sole traders has changed a fair bit in the last couple of years, and it trips people up.
Class 2 National Insurance was abolished from 6 April 2024. Previously self-employed people paid a flat weekly rate of Class 2 NI once profits went over a set threshold. That charge no longer applies, which was a welcome saving for lower-earning sole traders.
Class 4 National Insurance still applies on your self-employment profits, and it’s calculated automatically through your Self Assessment return. The current rates are:
- 8% on profits between £12,570 and £50,270
- 2% on profits above £50,270
If your profits are below £12,570, you don’t pay Class 4 NI at all. Some self-employed people with low profits still choose to pay Class 2 NI voluntarily, because it protects their entitlement to the State Pension and certain benefits. Check the current voluntary rate on GOV.UK, since it’s reviewed each tax year.
Penalties for registering late
Missing the 5 October deadline doesn’t automatically trigger a fine, but it puts you at risk of a failure to notify penalty if you also don’t pay your tax bill on time.
Here’s how it actually works, according to GOV.UK and HMRC’s compliance guidance:
- If you register late but still pay all the tax you owe by 31 January, HMRC has indicated the failure to notify penalty should be nil, because no tax remained unpaid by the due date.
- If you register late and tax is still outstanding, HMRC can charge a penalty based on a percentage of the unpaid tax, known as “potential lost revenue.”
- For genuine, non-deliberate mistakes, penalties typically range from 0% to 30% of the unpaid tax.
- For deliberate but not concealed failures, penalties can rise to around 70%.
- For deliberate and concealed failures, the penalty can reach 100% of the unpaid tax.
Cooperating with HMRC and disclosing the situation yourself, rather than waiting to be caught, usually reduces the penalty significantly. If you have what HMRC considers a “reasonable excuse,” no penalty applies at all.
This is separate from late filing penalties, which kick in if you miss the 31 January tax return deadline itself: an initial £100 fixed penalty, then £10 a day after three months up to £900, then a further 5% of the tax due (or £300, whichever is higher) at both the 6-month and 12-month marks. These can stack on top of failure to notify penalties, because registering and filing are treated as separate obligations.
The safest approach is simple: register as soon as you start trading, well before the deadline, so none of this becomes a risk in the first place.
What changes once Making Tax Digital applies to you
Making Tax Digital for Income Tax is being rolled out in stages based on how much you earn, and it will eventually replace the single annual Self Assessment return with quarterly digital updates plus a year-end final declaration.
- From April 2026: applies if your gross income from self-employment and/or property is over £50,000
- From April 2027: threshold drops to over £30,000
- From April 2028: threshold drops to over £20,000
Whether you’re affected depends on your gross turnover in the relevant earlier tax year, not your profit. Most newly self-employed people starting out won’t be within scope straight away, but it’s worth knowing it’s coming. We’ve covered exactly what MTD means for record-keeping, software and deadlines in our separate guide to [Making Tax Digital for the self-employed].
FAQs
Do I need to register as self-employed if I earn under £1,000?
No. If your gross income from self-employment is £1,000 or less in a tax year, you’re covered by the trading allowance and don’t need to register or file a return for that income. If you go even slightly over £1,000, registration becomes required.
How long does it take to register as self-employed with HMRC?
The online form itself takes around 20 minutes to complete. After that, HMRC typically posts your UTR within about 10 working days, though it can take longer near the October deadline when volumes are high. Registering early avoids any last-minute delay.
Can I register as self-employed and employed at the same time?
Yes. Many people work a PAYE job and run a side business at the same time. You’ll pay Income Tax and National Insurance on your employment income as normal through PAYE, and separately declare your self-employed income and pay any tax due through Self Assessment.
What happens if I miss the 5 October deadline?
Nothing happens immediately if you still pay any tax owed by 31 January. If tax remains unpaid after that date, you risk a failure to notify penalty based on a percentage of the amount owed. Register as soon as possible if you’ve missed the date, since acting promptly usually reduces any penalty.
Do I need a business bank account to register as self-employed?
No, it’s not a legal requirement for sole traders, though many banks and accountants recommend keeping business income and expenses separate to make record-keeping easier at tax return time.
What’s the difference between registering as self-employed and setting up a limited company?
Registering as self-employed makes you a sole trader: you and the business are legally the same, and you pay Income Tax and Class 4 NI through Self Assessment. Setting up a limited company creates a separate legal entity, involves registering with Companies House, and comes with different tax and reporting rules entirely.
Do I need to register as self-employed for a hobby that occasionally makes money?
Only if the income goes over the £1,000 trading allowance and HMRC would consider what you’re doing to be trading, meaning you’re selling regularly with the aim of making a profit rather than just occasionally clearing out unwanted items.
Can I backdate my self-employment registration?
Yes, and if you started trading some time ago without registering, it’s better to register now with the correct start date than to keep delaying. HMRC can ask you to file returns covering the years you should have been registered, and registering promptly once you realise the mistake helps limit any penalty.
