How to Register as a Sole Trader in the UK
A step-by-step guide to HMRC registration — what you need, when to do it, and what happens after you're registered.
Quick Summary
- ✅ Registration is free and done online at gov.uk
- ✅ You must register by 5 October in your second tax year
- ✅ You'll receive a UTR number within 10 working days
- ✅ You can be employed and self-employed at the same time
What Is a Sole Trader?
A sole trader is a self-employed individual who owns and runs their business. It's the simplest business structure in the UK — there's no legal distinction between you and your business.
You keep all profits after tax, but you're personally liable for any business debts. Most freelancers, contractors, and small service providers start as sole traders.
Step-by-Step Registration
Step 1: Check If You Need to Register
You need to register if your self-employment income exceeds £1,000 in a tax year (the Trading Allowance). Below £1,000, you don't need to tell HMRC. If you're in any doubt, register — it costs nothing.
Step 2: Create a Government Gateway Account
Visit gov.ukand create a Government Gateway account if you don't already have one. You'll need an email address and phone number for two-factor authentication.
Step 3: Register for Self Assessment
Log in to your Government Gateway account and register for self-assessment as a sole trader. You'll need to provide:
- • Your full name and National Insurance number
- • Your date of birth
- • Your address
- • The date you started trading
- • Your business name (can be your own name)
- • What your business does
- • Your business address (can be your home)
Step 4: Wait for Your UTR Number
HMRC will send your Unique Taxpayer Reference (UTR) by post within 10 working days (21 days if abroad). This 10-digit number is needed for filing tax returns. Some clients may also ask for it.
Step 5: Set Up Your Records
Start keeping records from day one. Track all income and expenses, keep receipts, and use invoicing software to maintain a professional trail.
Registration Deadlines
You must register by 5 Octoberin your business's second tax year:
- 📅 Started trading between 6 April 2025 and 5 April 2026 → register by 5 October 2026
- 📅 Started trading between 6 April 2026 and 5 April 2027 → register by 5 October 2027
Late registration can result in penalties. Register as soon as you start trading to avoid issues.
What Happens After Registration
- 📬 UTR arrives by post— keep this safe, you'll need it annually.
- 📊 File a self-assessment tax return — due 31 January following the end of each tax year.
- 💷 Pay income tax and National Insurance — calculated on your profits, paid through self-assessment.
- 📋 Consider VAT registration — mandatory above £90,000 turnover, optional below.
- 🏦 Open a business bank account — not legally required but strongly recommended for clear record-keeping.
Record-Keeping Obligations
HMRC requires you to maintain accurate records of all business transactions. This includes:
- 📁 All income and sales records
- 📁 All business expenses and receipts
- 📁 Bank statements for your business account
- 📁 Invoices you've sent and received
- 📁 Records of personal use of business assets
Keep records for at least 5 years after the 31 January filing deadline for each tax year.
Frequently Asked Questions
When do I need to register as a sole trader?
By 5 October in your business's second tax year. For example, if you started in June 2026, register by 5 October 2027. We recommend registering immediately.
How much does it cost to register?
Registration is completely free through the HMRC website. No fees are involved in becoming a sole trader.
Do I need to register if I earn less than £1,000?
If your gross trading income is under £1,000, you may be covered by the Trading Allowance and don't need to register. Above £1,000 you must register.
What is a UTR number and when will I get one?
A UTR (Unique Taxpayer Reference) is a 10-digit number from HMRC. You'll receive it by post within 10 working days of registering. You need it for filing tax returns.
Can I be employed and self-employed at the same time?
Yes. Your employer handles PAYE on your salary, and you declare self-employment income separately through self-assessment. Both incomes are combined for tax.
Start Invoicing From Day One
Once you're registered, Experi helps you create professional invoices, track income, and keep the records HMRC expects — all in one place.
Start Free — No Credit Card Required