How to Register as Self-Employed in the UK

If you’re planning to start your own business in the UK or provide freelance or contractor services, chances are that you’ll need to go through the process of self-employed registration. 

But what does being self-employed mean, and how can you register?

In the following sections, we offer an in-depth, step-by-step guide on how to register as self-employed in the UK.

What Does It Mean to Be a Self-Employed Person in the UK

A self-employed individual is a person who works for themselves rather than being employed by a company or organisation. Self-employed people are responsible for managing their own work, deciding their hours, selecting their clients, and making choices related to marketing, operations, and finances. 

Such individuals are in full control of their earnings and losses and can be either freelancers, contractors, sole traders, partnerships, or small business owners. 

Self-employed people are also responsible for paying their taxes, making National Insurance contributions, and covering business expenses. 

Legal Obligations of a Self-Employed Person

If you’re working on a standard employment contract with an employer, your income tax and National Insurance deductions are managed by the employer. This money is automatically taken from your PAYE salary, while the remainder makes up your weekly or monthly pay.

However, if you’re planning to register as self-employed, you need to be aware that you’ll be the one handling tax and National Insurance contributions on the profits that you make via self-assessment.

Self-employed individuals in the UK must register for Self-Assessment with HM Revenue & Customs (HMRC), informing them that they’re running their own business. 

This must take place before the 5th of October after the tax year you started working to avoid accumulating penalties. 

As a self-employed person, it’s a legal requirement that you:

• Pay National Insurance Contributions;
• Pay Income Tax;
• File a Self-Assessment tax return every year.

Understanding these legal obligations is key to running an uninterrupted business and avoiding legal conflicts.

When You Need to Register as a Self-Imployed

If you have a side hustle that’s generating money or have a small sole trader business running, you’ll need to register as self-employed. 

Overall, it’s a legal requirement to register if:

• You run your own business as a sole trader and manage it independently.
• You made more than £1,000 in the previous tax year from self-employed work, qualifying for the trading allowance.
• You want to deduct business-related costs from your self-employment earnings.
• You work in the gig economy, such as delivering food, driving for ride-share apps, or freelancing on demand.
• You offer professional services on your own, for example, as a hairdresser, photographer, or consultant.
• You are a member of a business partnership.
• You sell products or services with the intention of earning a profit, even if it’s a part-time or side project.

Keep in mind that it’s mandatory to register as self-employed if you fall under the above-mentioned categories even if you’re currently employed in another job.

If you’re unsure whether it’s mandatory that you register, we recommend contacting HMRC for additional information. 

How To Register as Self-Employed

Here’s a step-by-step guide on how to register as self-employed in the UK.

Prepare The  Required Information

First, gather all the information you’ll need. The essential details to collect include:

• The type of business you’re running;
• The date you started working for yourself;
• Your National Insurance Number;
• Home address and contact details;
• The type of self-employment work you do;
• Business contact details. 

This information will be required as part of the registration process, and it’s best to have it prepared beforehand. 

Register for Self Assessment

If you’ve never submitted a tax return before, you’ll need to register for Self Assessment and Class 2 National Insurance through your business tax account. 

To sign in, you’ll need a Government Gateway account with a user ID and password. If you don’t already have one for a business tax account, you can create it during the registration process.

If you’re unsure about any of the details required for your application, it’s a good idea to seek independent financial advice or contact the HMRC helpline:

HMRC Helpline

Mon-Fri, 8am – 6pm

0300 200 3310

Start your registration at: https://www.gov.uk/register-for-self-assessment/self-employed 

Setup at HMRC (His Majesty Revenue and Customs)

After completing the registration questions, HMRC will set up your account. Within 10 days, you’ll receive a letter containing your Unique Taxpayer Reference (UTR) number. Your UTR number is a 10-digit number that is crucial for managing your tax affairs. Keep this somewhere safe, as you’ll need it to file your tax return.

Next, HMRC will send another letter with an activation code for your account. Store this securely too, though don’t worry if it’s misplaced – you can request a new one.

Once your account is activated, you’ll be able to submit your tax return online anytime before the deadline.

You can also complete this process via post. All you’ll have to do is download the SA1 form from HMRC’s website. After filling it in, send it by post and be prepared to wait, as this option takes longer than the online registration process. 

Important Timelines to Know About as Self-Imployed

There are a few crucial deadlines to make a list of and remember:

• You should register as self-employed by 5th October in your business’s second tax year. For instance, if you started on 5 June 2024, you need to register by 5 October 2025. Failing to do so can cause a fine of £100 or more.

• If you’re submitting a paper tax return, it must be sent to HMRC by 31 October. Missing this deadline can lead to penalties, even if you don’t owe any tax.

• To have HMRC collect any tax you owe through your PAYE tax code, your online tax return must be submitted by 30 December. This option is only available if your tax bill is under £3,000 and you already pay tax via PAYE.

• The final deadline to file your online tax return and settle any tax owed for the previous tax year is 31 January. This is a crucial date for all self-employed individuals to remember.

Planning around these timelines supports smoother cash flow and gives you more clarity throughout the tax year.

How To Manage Taxes and National Insurance as Self-Employed

You must file a Self Assessment tax return each year to report your income and expenses. To estimate your tax liability accurately, use one of the many self-employed tax calculators available online.

National Insurance Contributions, on the other hand, are a bit more complex.

For self-employed individuals, there are two main types of National Insurance Contributions:

• Class 2 NICs – A fixed weekly payment of £3.50 for the 2025/26 tax year (up slightly from £3.45 in 2024/25).
  
• Class 4 NICs – A percentage-based contribution to your profits. Both types are calculated automatically when you complete your Self Assessment tax return.

Here’s what you need to know about each.

Class 2 NICs

Since the 2022/23 tax year, the government has changed how Class 2 contributions work. You no longer have to pay Class 2 NICs if your profits exceed the Small Profits Threshold.

However, if your earnings are below that threshold, you can choose to make voluntary Class 2 contributions to keep your National Insurance record up to date. The voluntary rate remains £3.50 per week in 2025/26 (or £3.45 per week in 2024/25).

Class 4 NICs

For both the 2024/25 and 2025/26 tax years, Class 4 NICs apply if your profits are over £12,570, known as the Lower Profits Limit.

You’ll pay:

• 6% on profits between £12,570 and £50,270
• 2% on profits above £50,270 (the Upper Profits Limit)

HMRC calculates Class 4 NICs as part of your annual Self Assessment. 

Payments are usually made in two parts:

• 31 January – your main Self Assessment payment
• 31 July – your mid-year payment on account (an estimate towards the next year’s bill)

If there are gaps in your National Insurance record, HMRC gives you the option to make voluntary contributions to protect your entitlement to benefits such as the State Pension.

These gaps can occur for several reasons – for example, if you were self-employed but didn’t pay contributions because your profits were below the minimum threshold, or if you lived overseas for a period of time.

In these cases, you can choose to pay voluntary Class 2 or Class 3 National Insurance contributions to fill those missing years.

Keeping Accurate Records

To make sure you meet your tax obligations, keep accurate records of:

• Sales and income;
• Business expenses;
• Payroll records (in case you have employees);
• Other documents, like receipts, bank statements, and invoices.

It’s highly recommended that you keep these records safe for at least five years in case HMRC asks to review them in the future. 

Industry-Specific Considerations when Registering as Self-Employed 

When you register as self-employed, some industries have specific rules you need to follow.

For example, construction workers or other professionals involved in the construction industry must register for the Construction Industry Scheme (CIS). This requirement applies to all subcontractors, including trades such as builders, painters, and carpenters. 

Failing to register means HMRC will deduct tax at a higher rate – 30% instead of the standard 20%, which can significantly reduce your income.

There may also be different tax implications for short-term projects and freelance work. 

How to Manage Your Self-Employed Work Post-Registration 

Once you’ve registered as self-employed, the next step is learning how to manage your finances effectively. Good financial management not only keeps your business running smoothly but also ensures you’re prepared for tax season.

Track Financial Performance

Keeping a close eye on your costs and profits is one of the most important habits for any self-employed person. 

By tracking your financial performance regularly, you’ll understand how profitable your work is and where you can cut unnecessary costs.

Here’s how to stay on top of it:

• Record all income and expenses – Use accounting software, a spreadsheet, or even a simple app to log every payment received and every expense made. This makes your Self Assessment tax return much easier to complete later.
  
• Review profits monthly or quarterly – Regularly comparing your income against your business costs helps you spot trends early – for example, which months are busiest, which clients are most profitable, or which expenses could be reduced.
  
• Keep receipts and invoices organised – Store digital or paper copies of all receipts and invoices in a safe place. As noted, HMRC can ask for these records for up to five years after the submission deadline.

Even though self-employed individuals aren’t legally required to open a business bank account, having one can make your life much easier. It can make a clear distinction between personal and business finances and simplify bookkeeping.

Prepare for Future Tax Years

To minimise risks of penalties and legal conflicts, make sure you’re planning ahead for taxes. 

Since tax isn’t automatically deducted from your income, you’ll need to set aside money regularly to cover your tax and National Insurance bills.

Here are some simple solutions to explore:

• Save for tax throughout the year – A good rule of thumb is to set aside 20-30% of your profits from each payment you receive. If you’re accepting card payments through a merchant account, consider transferring a portion of each payment into a separate savings account.
  
• Mark important deadlines – Add reminders for your Self Assessment filing and payment dates. Missing these can cause penalties or interest charges.
  
• Estimate your tax bill early – There are plenty of online tax calculators or accounting tools that can help you estimate how much you owe before the official deadline, giving you time to budget accordingly.

At the end of each tax year, take time to look over your income, expenses, and savings goals. This will help you plan for business growth and identify areas for improvement in the next year.

Conclusion

Registering as self-employed in the UK is crucial in some scenarios. We hope that this step–by-step guide on how to register as self-employed will help answer your questions, leaving you better prepared for the process.

If you’re new to self-employment, seek support when needed and focus on building solid financial habits. These will help you grow your business effectively.

Frequently Asked Questions

What happens after I register as self-employed?

Once registered, HMRC will send your UTR number and instructions for accessing your online tax account. You’ll then need to complete a Self Assessment tax return each year, declaring your income, expenses, and any tax due.

How does being self-employed affect my State Pension?

When you’re self-employed, you don’t automatically contribute through PAYE like employees do. Instead, your National Insurance contributions (Class 2 and Class 4) count towards your State Pension. Keeping your contributions up to date helps ensure you qualify for the full pension when you retire.

Do I need a business bank account to register as self-employed?

It’s not legally required, but having a separate bank account or merchant account for your business helps you track income, expenses, and prepare for taxes more easily. It also makes it simpler to calculate your taxable income at the end of the year.