How to Register as a Sole Trader UK (Step by Step)
Quick answer
Registering as a sole trader means registering for Self Assessment with HMRC as self-employed. You must do it if you earned more than GBP 1,000 from self-employment in a tax year, by the 5 October after that tax year ends. It is free, done online, and gives you a Unique Taxpayer Reference (UTR).
Registering as a sole trader: the key facts (2026/27)
| Question | Answer |
|---|---|
| Who must register | Anyone earning more than GBP 1,000 from self-employment in a tax year (6 April to 5 April) |
| Deadline | By 5 October after the end of the tax year you started trading |
| Cost | Free - there is no fee, unlike a limited company |
| How | Online through your HMRC Government Gateway account |
| What you get | A Unique Taxpayer Reference (UTR) and a Self Assessment record |
| If you have filed before | Reactivate your existing Self Assessment record and use your existing UTR |
| Business name | Use your own name or a trading name; you do not register it anywhere |
| Records to keep | All business income and expenses, to work out your tax return |
| Class 4 NI 2026/27 | 6% on profits from GBP 12,570 to GBP 50,270, then 2% above GBP 50,270 |
| Class 2 NI 2026/27 | Treated as paid once profits pass the small profits threshold; voluntary (GBP 3.65 a week) below it |
Step by step
- 1
Check you actually need to register
Confirm you earned, or expect to earn, more than GBP 1,000 from self-employment in the tax year. Below that the GBP 1,000 trading allowance usually means you do not need to register at all.
- 2
Choose your business name
Trade under your own name or pick a trading name. It must not include "limited", "Ltd", "LLP" or "plc", be offensive, or be too similar to an existing trademark. You do not register a sole trader name anywhere, but it must appear on your invoices and letters.
- 3
Set up or sign in to your Government Gateway account
Create an HMRC online account, or sign in if you already have one. If you have sent a Self Assessment return before, reactivate your existing record rather than registering from scratch.
- 4
Register for Self Assessment as self-employed
Complete HMRC online registration. HMRC then posts your Unique Taxpayer Reference (UTR), which can take a couple of weeks, so register in good time.
- 5
Register by the 5 October deadline
Register by 5 October after the end of the tax year you started trading. Miss it and you can face a failure-to-notify penalty based on the tax you owe.
- 6
Keep records, then file and pay
Record all your income and expenses, then file your Self Assessment return and pay any Income Tax and National Insurance by the following 31 January.
Registering as a sole trader sounds official, but it is really just telling HMRC you will file a Self Assessment tax return. There is no Companies House, no fee, and no business name to lodge anywhere. The steps above are the whole process; the table is the detail at a glance.
The part most guides skip is the very first step. You only have to register if you earned more than GBP 1,000 from self-employment in the tax year - below that, the trading allowance usually covers you and you can skip the admin entirely. You can also be employed and self-employed at the same time: your PAYE job and your sole trader income sit on the same return, and your Personal Allowance is counted once across both.
Not sure whether to stay a sole trader or incorporate? Weigh it up in limited company vs sole trader, or run your own numbers in the sole trader vs limited company calculator. Once you are registered, our Self Assessment tax return guide covers filing, and if this began as a side project, side hustle tax goes deeper on the GBP 1,000 trading allowance.
Figures are for the 2026/27 tax year and are taken from gov.uk; tax rules and thresholds can change. This is general information, not financial or tax advice.
Frequently asked questions
How do I register myself as a sole trader?
Register for Self Assessment as self-employed on gov.uk through your Government Gateway account. HMRC then sends your Unique Taxpayer Reference (UTR) by post. If you have filed a tax return before, reactivate your existing record instead of registering again.
How much does it cost to register as a sole trader?
Nothing. Registering with HMRC is free. Unlike setting up a limited company, there is no Companies House fee and nothing to pay to start trading.
Do I need to tell HMRC I am a sole trader?
Yes, if you earned more than GBP 1,000 from self-employment in the tax year. Below that figure the trading allowance usually means you do not need to register or file a return for it.
Is your first year as a sole trader tax free?
No. There is no tax-free first year. You pay tax on profits above your Personal Allowance as in any other year. The myth comes from timing: your first tax bill is not due until the 31 January after your first tax year ends, so the money can arrive long before the bill.
Can I be employed and a sole trader at the same time?
Yes. Your PAYE job and your self-employment sit side by side on one Self Assessment return, and your Personal Allowance is used once across both. This is the normal setup for anyone running a side business alongside a job.
Sources
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General information, not financial advice. Tax rules and figures can change; check the current position on gov.uk before acting.