How to Register as a Sole Trader in the UK: 2026 Step-by-Step Guide

Registering as a sole trader in the UK is one of the simplest things you will do when starting your business. There is no cost, no complex paperwork, and you can complete the entire process online in under an hour. Yet it is also one of the steps that causes the most anxiety for new freelancers and self-employed workers, largely because the HMRC website can be confusing and the consequences of getting it wrong feel serious.

This guide walks you through every step of the registration process, explains the deadlines you need to meet, and covers the common questions and mistakes that trip people up.

Do You Actually Need to Register?

You must register as a sole trader with HMRC if you earned more than £1,000 from self-employment in a tax year (6 April to 5 April). This £1,000 figure is your gross income before expenses — not your profit.

If you earn less than £1,000, you may be covered by the Trading Allowance, which means you do not need to register or report that income. However, if you want to claim business expenses against your self-employed income (which could reduce your overall tax bill), you will need to register and file a Self Assessment return even if your income is below £1,000.

In practice, if you are taking freelancing or self-employment seriously, you should register. It is free, and it sets you up properly from the start.

When Is the Deadline to Register?

You must register with HMRC by 5 October in the second tax year after you started trading. In practical terms, this means:

• If you started self-employed work between 6 April 2025 and 5 April 2026, you must register by 5 October 2026.
• If you started between 6 April 2026 and 5 April 2027, your deadline is 5 October 2027.

However, there is no penalty for registering early, and doing so avoids any risk of missing the deadline. Our advice: register as soon as you start trading, or even before. It takes very little time and gives you peace of mind.

Failing to register on time can result in a penalty from HMRC, and you may also face penalties for late filing of your Self Assessment tax return if the delay means you miss the filing deadline.

What You Need Before You Start

Gather the following information before you begin the registration process:

• Your National Insurance number. You will find this on your payslip, P60, or any letter from HMRC or DWP. If you cannot find it, you can request it from HMRC.
• Your personal details. Full name, date of birth, current address, and phone number.
• The date you started (or plan to start) self-employed work. This is the date you first started trading, not the date you register.
• Your business name (if you trade under a name other than your own).
• Your business address (this can be your home address).
• The nature of your business. You will need to describe what you do — for example, “freelance graphic designer” or “IT consultant.” HMRC uses this to assign a Standard Industrial Classification (SIC) code to your activity.

Step-by-Step Registration Process

Step 1: Create a Government Gateway Account

If you do not already have a Government Gateway account, you will need to create one. Go to the HMRC sign-in page and select “Create sign in details.” You will need to provide an email address and create a password. HMRC will then send you a 12-digit User ID, which you should save securely — you will need it every time you access your HMRC account.

You will also need to set up two-step verification for security. You can use the HMRC app, a text message to your mobile phone, or a landline voice call.

Step 2: Register for Self Assessment as a Sole Trader

Once your Government Gateway account is active, navigate to the “Register for Self Assessment” section. You can find this by searching for “register for Self Assessment” on the GOV.UK website, which will take you directly to the correct starting page.

Select the option that applies to you — in most cases, this will be “You are registering because you are self-employed (for example, a sole trader).” If you have other reasons for registering (such as rental income), you can select multiple options.

Step 3: Complete the CWF1 Form

The registration itself involves completing the CWF1 form online. Despite the formal-sounding name, it is a straightforward questionnaire. You will be asked to provide:

• Your personal details and National Insurance number
• The date your self-employment began
• A description of your business activity
• Your business name and address
• Whether you have any employees (if you are a sole freelancer, the answer is no)
• Your accounting period — more on this below

Work through each section carefully. The form is not long, and most fields are simple factual entries.

Step 4: Choose Your Accounting Period

During registration, you will need to specify your accounting year end date. For most sole traders, the simplest option is to align your accounting year with the tax year, which runs from 6 April to 5 April.

Since the 2024/25 tax year, the basis period reform means that all sole traders are taxed on profits arising in the tax year (6 April to 5 April), regardless of their accounting date. While you can technically choose a different accounting year end, aligning with the tax year avoids complexity. If you are just starting out, use 5 April as your year end.

Step 5: Submit and Wait for Your UTR

After submitting your registration, HMRC will process it and send you a Unique Taxpayer Reference (UTR) number. This is a 10-digit number that identifies you for tax purposes. You will need it when filing your Self Assessment return and for various other interactions with HMRC.

Your UTR is usually sent by post within 10 working days of registration, though it can sometimes take longer. Keep it safe — you will use it for as long as you are self-employed.

Once you have your UTR, you can access your Self Assessment account through the HMRC online portal. Here you will be able to file tax returns, make payments, and view your tax position.

Setting Up for Self Assessment

Registering is only the first step. To stay compliant and avoid surprises at tax time, set yourself up properly from the start.

Keep Records from Day One

HMRC requires you to keep records of all your business income and expenses. You must retain these records for at least five years after the 31 January submission deadline for the relevant tax year. Key records include:

• All invoices you send to clients
• Receipts for business expenses
• Bank statements for any accounts used for business transactions
• Mileage logs if you claim vehicle expenses
• Records of any assets you purchase for the business

You do not need to submit these records with your tax return, but you must be able to produce them if HMRC asks. Using accounting software such as FreeAgent, Xero, or QuickBooks makes this significantly easier than keeping paper records.

Understand Your Tax Obligations

As a sole trader, you will pay:

• Income Tax on your taxable profits (after your Personal Allowance, which is £12,570 for 2025/26)
• Class 2 National Insurance at £3.45 per week (if your profits exceed £12,570)
• Class 4 National Insurance at 6% on profits between £12,570 and £50,270, and 2% on profits above that

Your first Self Assessment tax return for the 2025/26 tax year is due by 31 January 2027 if you file online (or 31 October 2026 if you file a paper return). Any tax owed must be paid by the same date.

Set Aside Money for Tax

One of the biggest mistakes new sole traders make is spending all their income and then scrambling to pay their tax bill. A sensible approach is to set aside a percentage of every payment you receive into a separate savings account. For most sole traders, setting aside 25-30% of your profits will comfortably cover your Income Tax and National Insurance.

Payments on Account

Be aware that after your first year, HMRC may require you to make payments on account. These are advance payments towards your next year’s tax bill, each equal to half of your previous year’s total tax. They are due on 31 January and 31 July. This can come as a shock if you are not prepared, because your first January payment may include both your full tax bill for the previous year and the first payment on account for the current year.

Common Registration Mistakes to Avoid

Confusing sole trader registration with Companies House. As a sole trader, you do not need to register with Companies House. Companies House registration is only required for limited companies (Ltd) and limited liability partnerships (LLPs). HMRC registration is the only registration you need as a sole trader.

Using the wrong start date. Your start date should be the date you first began trading — this might be the date you took on your first client, completed your first piece of paid work, or began actively seeking business. It is not the date you registered with HMRC.

Registering as the wrong entity type. Make sure you select sole trader (self-employed) rather than partnership or limited company during the registration process. Each business structure has a different registration path.

Not registering at all because you think you earn too little. If there is any chance your self-employed income will exceed £1,000 in the tax year, register. There is no cost, and it protects you from penalties.

Losing your UTR number. Your UTR is assigned once and does not change. Keep it somewhere secure. If you lose it, you can find it on previous tax returns, in your HMRC online account, or by calling HMRC directly — but this takes time and can delay your filing.

Do You Need to Register for Anything Else?

Beyond HMRC registration, there are a few other things to consider:

VAT registration is only required if your taxable turnover exceeds £90,000 in a rolling 12-month period. Below that threshold, registration is optional.

ICO registration is required if you handle personal data in your business (which most freelancers do, even if it is just client contact details). The fee for sole traders is £40 per year, payable to the Information Commissioner’s Office.

Business insurance is not legally required for sole traders (unless you employ people, in which case Employers’ Liability insurance is mandatory), but professional indemnity insurance is strongly recommended for anyone providing professional services or advice.

A business bank account is not legally required for sole traders, but it is highly recommended. Keeping your personal and business finances separate makes bookkeeping far simpler and gives you a clear audit trail if HMRC ever reviews your records.

Moving Forward

Registering as a sole trader is the administrative foundation of your self-employed life, but it is just the beginning. Once registered, focus on building good financial habits: track every expense, invoice promptly, set aside money for tax, and file your return well before the deadline. These habits will save you time, money, and stress for every year you trade.

The registration process itself is deliberately simple because the government wants to make it easy for people to work for themselves and pay the right amount of tax. Take the twenty minutes to do it properly, and you can get back to the work that actually matters — building your business.