How to Register as Self-Employed in the UK (Step-by-Step Guide 2026)

*Disclaimer: This podcast was recorded in the 2025/26 tax year. Tax rules may have changed since recording. Please refer to the guidance below for the most up-to-date information.

Before you register as self-employed with HMRC, it is important to understand how tax is collected in the UK and how this differs between employment and self-employment.

In the UK, there are two main ways in which tax is collected.

The first is through Pay As You Earn (PAYE), which applies to employed individuals. Under the PAYE system, income tax, National Insurance (NI), pension contributions and other deductions, such as student loan repayments, are usually taken directly from your wages by your employer before you receive them.

However, if you are self-employed, you are responsible for reporting your income and paying any tax due through a Self Assessment tax return. In order to do this, you must first register as self-employed with HMRC.

This guide explains how to register as self-employed with HMRC online, providing clear, step-by-step guidance to help you get started with confidence.

Do I need to register as self-employed?

You must register as self-employed with HMRC if you earn more than £1,000 in a tax year from self-employment.

To be self-employed simply describes your employment status. It means that you are not employed but rather working for yourself to generate an income. To HMRC there will be certain indicators which demonstrate you are self-employed such as:

• You run your own business and are solely responsible for the success or failure of it
• You’re able to choose who your customers or clients are and can have several of them at the same time
• You decide how, where and when you do your work
• You are able to employ other people and pay them yourself
• You have to provide your own equipment necessary to complete your work
• You are responsible for fixing problems or dealing with unsatisfied customers/clients even if that means working in your own time
• You can decide how much you want to charge for your products or services
• You sell goods or services to make a profit

If you’re still unsure as to whether or not you should be considered as self-employed then you can use HMRC’s online tool by completing a few questions.

Is there a difference between being self-employed and a sole trader?

Although the terms ‘self-employed’ and ‘sole trader’ are often used interchangeably, there is a distinct difference in meaning. To describe someone as self-employed is to refer to their employment status, whereas to describe someone as a sole trader means to depict someone by their business structure. However, it is possible for a person to be both employed and self-employed where they possibly have employment Monday to Friday but have a separate job on the side in which they are self-employed.

Other business structures which may seem to fall under the definition of being self-employed include partners in partnerships or directors of limited companies. While you may be running your own business and generating your own income, for tax purposes and in HMRC’s eyes, you are not classed as self-employed in the same way as a sole trader.

How do I register as self-employed with HMRC?

Register as self-employed with HMRC online

To register as self-employed online, you will need to:

Step 1: Create a Government Gateway account
To create a Government Gateway account, you will need to go to HMRC’s official sign-in page. You will be asked to input your email and create sign-in details. A confirmation code will be sent to your email. You will also need to set a password and a recovery phrase. HMRC will provide you with a 12-digit user ID, which you should keep safe and use each time you log in.

Step 2: Register for Self Assessment
You will then need to select the option to register as a sole trader (or partnership if applicable) and confirm that you are self-employed.

Step 3: Provide your details
You will be asked to provide:

• Your full name and address
• National Insurance number
• Business start date
• Nature of your business
• Your Unique Taxpayer Reference (UTR), if you already have one

Step 4: Receive your UTR
If you do not already have a UTR, HMRC will send one to you by post. This can take:

• Up to 10 working days if registered online
• Up to 3 weeks if registered by post
• Up to 28 days during busy periods

Step 5: Activate your account
HMRC will send an activation code by post, which you will need to use to activate the Self Assessment service and link it to your Government Gateway account.

Step 6: Access your account
Once activated, you can log in to manage your Self Assessment tax returns, payments and correspondence.

When do I need to register as self-employed?

If you start working for yourself as a sole trader or earn more than £1,000 through a hobby or side income, you are required to register with HMRC for Self Assessment. Even where no tax is ultimately due, there may still be an obligation to report your income. The deadline to register is 5 October following the end of the tax year in which you began trading.

For example, if you start trading between 6 April 2025 and 5 April 2026, you must register by 5 October 2026.

Failure to register within the required timeframe can result in fines and penalties being issued by HMRC. Registering notifies HMRC that you are earning income outside of PAYE and ensures you are correctly set up for tax reporting. Following registration, HMRC will issue you with a Unique Taxpayer Reference (UTR), which is required when submitting your Self Assessment tax returns.

HMRC new rules for self-employment

One of the most significant ongoing changes is Making Tax Digital (MTD). This is HMRC’s move towards a fully digital tax system, requiring more self-employed individuals and landlords to keep digital records and submit updates more frequently, rather than relying solely on an annual Self Assessment tax return. The rollout is being phased, with plans to expand it further over the coming years.

From 6 April 2026, sole traders and landlords with a combined annual gross income of over £50,000 will be required to use MTD-compatible software to submit quarterly updates, along with a final declaration. This will replace the traditional annual Self Assessment return, although a final submission will still be required by 31 January following the end of the tax year. It is important to note that this threshold is based on gross income before expenses are deducted, rather than profit.

Another key change is the reform of Class 2 National Insurance contributions. Self-employed individuals are no longer required to pay Class 2 NICs where profits exceed the Small Profits Threshold. Instead, National Insurance credit is applied automatically.

Where profits fall below this threshold, individuals may still choose to make voluntary contributions in order to maintain their entitlement to certain state benefits, such as the State Pension.

How to tell HMRC you’re no longer self-employed

There may come a time where you decide to stop working for yourself. This could be due to moving into employment, retiring, or because your business has grown and you choose to operate through a limited company instead. If you stop working for yourself, you must notify HMRC so your Self Assessment record can be updated or closed.

This can be done by logging into your Government Gateway account and informing HMRC that you are no longer self-employed. You will also need to complete a final Self Assessment tax return covering the period up to your cessation date.

On your final return, you should include:

• The date you stopped trading
• Your final income and allowable expenses

At this stage, you may also be eligible to claim certain tax reliefs depending on your circumstances, such as Business Asset Disposal Relief or terminal loss relief, which can help reduce your final tax liability.

If applicable, you should also:

• Cancel your VAT registration
• Close your PAYE scheme if you have employees

As a sole trader, you remain personally liable for any business debts, so it is important to ensure that all outstanding obligations are settled when you cease trading.

It’s important to notify HMRC promptly, as failing to do so can result in ongoing requests

Get help when you’re self-employed

Whether you are about to become self-employed and would like guidance on your new employment status, or you are already self-employed and need support with your tax obligations, our chartered accountants can help.To get started, book an introductory consultation by calling 01865 24 55 11, and we can discuss the range of services that may be suitable for you.

FAQs