How to Become Self-Employed in the UK

Five Steps to Self-Employment

1. Decide What You Will Do

Identify your service or product. Consider your skills, experience, and the market demand. You do not need a formal business plan, but you should have a clear idea of who will pay you and why.

2. Register with HMRC

Register as self-employed on GOV.UK. You will receive a Unique Taxpayer Reference (UTR) within 10 working days. This is your identifier for filing tax returns and dealing with HMRC.

Register by 5 October in your second tax year, but registering immediately is better.

3. Open a Business Bank Account

Separate your personal and business finances. Many banks offer free business accounts for sole traders. This makes bookkeeping dramatically easier.

4. Set Up Your Record Keeping

Start tracking income and expenses from day one. Use accounting software rather than spreadsheets — it saves time and reduces errors.

5. Start Trading

Find clients, deliver your service, send invoices, and get paid. Set aside 25-30% of every payment for tax.

What You Do Not Need

• You do not need to register a company
• You do not need business premises
• You do not need employees
• You do not need a licence (unless your trade requires one)
• You do not need a formal qualification (unless your profession requires one)

Key Obligations

• File a Self Assessment tax return each year (by 31 January)
• Pay income tax and National Insurance on your profits
• Keep records for at least five years
• Register for VAT if your turnover exceeds £90,000

Start your self-employment journey with Accounted — Penny makes bookkeeping effortless.

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Self-employment starts with a single step. Sign up for Accounted and let Penny walk alongside you from the very beginning.