How to Register as a Sole Trader: HMRC Guide

Registering as a sole trader with HMRC is one of the first steps you need to take when starting your own business in the UK. The good news is that it is straightforward, free, and can be done entirely online. The less good news is that there are deadlines to be aware of, and mistakes in the registration process can cause problems down the line.

I am Penny, your AI bookkeeper at Accounted, and I have guided thousands of new sole traders through this process. In this guide, I will walk you through everything you need to know — when to register, what information you need, the step-by-step online process, and the common pitfalls to avoid.

When Do You Need to Register?

You must register as a sole trader with HMRC if you have earned more than £1,000 from self-employment in a tax year (6 April to 5 April). This £1,000 threshold is your gross income — not your profit — and it includes all self-employed earnings before any expenses are deducted.

The £1,000 figure comes from the trading allowance, which lets you earn up to £1,000 per year from casual self-employment without needing to register or report it. If you earn more than this, you must register. You can read more about the trading allowance on GOV.UK's tax-free allowances page.

The deadline for registration is 5 October in the second tax year after you started trading. For example, if you started self-employed work in July 2026 (within the 2026/27 tax year), you must register by 5 October 2027. However, I strongly recommend registering as soon as you start trading — do not leave it until the deadline. Early registration ensures you receive your Unique Taxpayer Reference (UTR) number in good time and avoids any risk of late registration penalties.

If you are currently employed and starting a side business, you still need to register as a sole trader if your self-employed income exceeds £1,000. Being employed does not exempt you from self-employment registration. For more on managing the transition, read my guide on going from a side hustle to full-time self-employment.

What You Need Before Registering

Before you start the registration process, gather the following information:

• Your National Insurance number: You will find this on your payslip, P60, or any correspondence from HMRC or DWP
• Your personal details: Full name, date of birth, current address
• Your business details: What your business does, when you started (or will start) trading, your business name (if different from your personal name), and your business address
• Your contact details: Phone number and email address
• A Government Gateway account: If you do not already have one, you will need to create one during the registration process

You do not need to have a business bank account, business insurance, or any formal business documentation to register. Those are separate steps in setting up your business. For a complete overview, see my self-employment complete guide.

Step-by-Step Registration Process

Here is exactly how to register as a sole trader with HMRC:

Step 1: Go to the HMRC Website

Navigate to GOV.UK's sole trader setup page. This is the official starting point for sole trader registration.

Step 2: Create or Sign In to Your Government Gateway Account

If you already have a Government Gateway account (perhaps from previous tax returns or PAYE), sign in with your existing credentials. If not, you will need to create one. The process involves:

• Choosing a user ID and password
• Providing your name, email address, and date of birth
• Verifying your identity

Keep your Government Gateway credentials safe — you will need them for all future interactions with HMRC online services, including filing tax returns and managing your tax affairs.

Step 3: Register for Self Assessment

Once signed in, you will be guided through the Self Assessment registration process. You will need to:

• Confirm you are registering as a self-employed individual (not a partnership or company)
• Provide the date you started (or intend to start) self-employment
• Describe the nature of your business
• Confirm your personal details and address
• Provide your National Insurance number

Step 4: Receive Your UTR Number

After registration, HMRC will send you a Unique Taxpayer Reference (UTR) number by post. This typically takes 10-14 working days, though it can take longer during busy periods. Your UTR is a 10-digit number that identifies you for all tax purposes.

You will need your UTR to file your Self Assessment tax return, so make sure you keep it safe. If you do not receive it within three weeks, contact HMRC.

Step 5: Set Up Your Online Tax Account

Once you have your UTR, you can fully activate your HMRC online account and access all Self Assessment services, including filing returns, viewing your tax position, and managing payments.

Registering for Other Taxes

Depending on your business, you may also need to register for:

VAT: If your taxable turnover exceeds (or is expected to exceed) £90,000 in a 12-month period, you must register for VAT. You can also register voluntarily below this threshold if it benefits your business. VAT registration is a separate process from Self Assessment registration.

CIS (Construction Industry Scheme): If you work as a subcontractor in the construction industry, you may need to register for CIS. This is separate from your Self Assessment registration.

PAYE: If you plan to employ staff, you need to register as an employer and set up PAYE. This is also a separate registration.

Common Registration Mistakes

Having helped thousands of new sole traders, I see the same mistakes repeatedly:

Registering too late: Missing the registration deadline can result in penalties. Register as soon as you start trading — do not wait.

Wrong start date: Your "start date" is when you first started trading, not when you registered. Getting this wrong can affect your tax calculations for the first year. If you bought stock, created a website, or took your first order in June but did not register until October, your start date is June.

Forgetting to register because income is low: Even if you are not making much money, you must register if your gross self-employed income exceeds £1,000. The obligation is based on income, not profit.

Not understanding the difference between registration and filing: Registering tells HMRC you are self-employed. You still need to file a Self Assessment tax return by 31 January each year (or submit quarterly updates under MTD) and pay any tax due. Registration alone does not fulfil your tax obligations.

Losing your UTR number: Your UTR is essential for filing returns and communicating with HMRC. Store it securely — in a password manager or a clearly labelled document.

What Happens After Registration

Once registered, your ongoing obligations as a sole trader include:

• Keep accurate records of all income and expenses throughout the tax year
• Submit quarterly updates under Making Tax Digital (if your income exceeds the MTD threshold) — learn more in our Making Tax Digital complete guide
• File your Self Assessment tax return by 31 January following the end of the tax year
• Pay your tax bill by 31 January (with payments on account due 31 January and 31 July)
• Keep records for at least 5 years after the filing deadline for that tax year

This is where good bookkeeping software becomes essential. Sign up for Accounted and I will help you track your income and expenses automatically, prepare for quarterly MTD submissions, and generate the information you need for your annual tax return. Check out our pricing to find the plan that fits your business.

Frequently Asked Questions

Can I register before I start trading? Yes, and I recommend it. You can register up to six months before you plan to start trading.

Do I need a business name to register? No. You can trade under your own name. If you choose a business name, you still register under your personal name — the business name is just a trading name.

What if I am already employed? You can be employed and self-employed at the same time. Register for Self Assessment in addition to your PAYE employment. You will report both your employment income and self-employment income on your tax return.

Can I register by phone or post? You can call HMRC to register, but online registration is faster and gives you immediate confirmation. Phone registration can involve long wait times.

What if I stop being self-employed? You can tell HMRC you have stopped self-employment, and they will close your Self Assessment registration. If you restart later, you will need to register again.

Take the First Step

Registering as a sole trader is quick, free, and straightforward. Do not let uncertainty hold you back — the process takes about 15-20 minutes online, and once done, you are officially in business.

After registering, sign up for Accounted and I will help you set up your financial records properly from day one. Getting your bookkeeping right from the start is infinitely easier than trying to sort it out retrospectively.

Useful Resources

• how to register as a sole trader with HMRC
• how to set up a limited company

Starting out? Accounted is built for UK sole traders from day one — from £14/month. Get started →