How to Become Self-Employed UK: The Step-by-Step Route

You become self-employed in the UK by trading for profit on your own account. If you earn more than GBP 1,000 from it in a tax year you must tell HMRC by registering for Self Assessment, then pay Income Tax and National Insurance on your profits. Below GBP 1,000 the trading allowance usually covers you.

Going self-employed: the steps and what each involves (2026/27)

Step	What it involves
Check you count as self-employed	You run a business for yourself: you take the risk, set your prices, choose your hours and have your own customers
Check the GBP 1,000 line	Earn GBP 1,000 or less gross from self-employment in the tax year and the trading allowance usually means you need not register or report it
Choose your structure	Sole trader is the default and simplest; a limited company is a separate legal person you can set up instead
Tell HMRC	Register for Self Assessment as self-employed to get a Unique Taxpayer Reference (UTR); it is free
Meet the deadline	Register by the 5 October after the end of the tax year you started trading
Pay your tax	Income Tax on profits above your Personal Allowance, plus Class 4 National Insurance
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 GBP 7,105; voluntary (GBP 3.65 a week) below that to protect your record
Keep records	All business income and expenses, kept for your tax return
Watch the VAT line	Register for VAT only once taxable turnover passes GBP 90,000 in a rolling 12 months