How to Register as a Sole Trader UK 2026 | AccountingStack

To register as a sole trader in the UK, you must register for Self Assessment with HMRC by 5 October in the tax year after you started trading. If you started in 2024/25, you must register by 5 October 2025. Registration is free and can be done online in around 20 minutes.

If you are a UK freelancer, sole trader or small business owner setting up or already running your business, this guide explains who needs to register, the steps to do it, the deadline, the details HMRC asks for, whether you can trade under a business name, what happens after registration, and how sole trader status compares with a limited company. Getting this right early helps you stay compliant with HMRC, avoid penalties, and file and pay tax on time.

Quick summary

Register by 5 October following your first year of trading. Go to GOV.UK and register for Self Assessment. HMRC will send your Unique Taxpayer Reference (UTR) by post within 10 days. You will then be able to file your first tax return.

Who needs to register as a sole trader?

You must register as a sole trader and complete a Self Assessment tax return if any of the following apply to you:

• You earned more than £1,000 from self-employment in the tax year (the trading allowance threshold)

• You want to pay voluntary National Insurance contributions to protect your State Pension entitlement

• You received a letter from HMRC asking you to register

• You claimed Child Benefit and your or your partner's income exceeded £50,000 (the High Income Child Benefit Charge)

Even if your self-employment income is below £1,000, you may still choose to register to keep your National Insurance record intact.

How to register: step by step

1

Create a Government Gateway account

Go to GOV.UK and create a Government Gateway account if you do not already have one. You will need your National Insurance number and a valid email address.

2

Register for Self Assessment

Use the HMRC online form to register for Self Assessment as a self-employed person. You will provide your personal details, business name (if different from your own name), and the date you started trading.

3

Receive your UTR by post

HMRC will send your Unique Taxpayer Reference (UTR) number by post, usually within 10 working days. This is a 10-digit number you will use on all correspondence with HMRC.

4

Activate your online account

Once you receive your UTR, you can activate your Self Assessment online account on GOV.UK. This lets you file returns and view your tax position.

5

Consider VAT registration

If your taxable turnover exceeds or is likely to exceed £90,000 in the next 12 months, you must also register for VAT. Below this threshold, VAT registration is optional but may be beneficial.

When is the registration deadline?

You must register by 5 October in the second tax year of trading. For example:

Late registration penalty

Missing the 5 October deadline can result in a penalty. HMRC can charge up to 30% of the unpaid tax if failure to notify is deliberate. Register as soon as you start trading to avoid this risk.

What information do you need to register?

• Your full name and date of birth

• Your National Insurance number

• Your home address and phone number

• Your email address

• The name of your business (if you trade under a business name)

• The date you started self-employment

• The nature of your business (a brief description)

You do not need to register your business name with Companies House as a sole trader. Only limited companies have this requirement.

Can you use a business name as a sole trader?

Yes. As a sole trader, you do not need to register your business name separately, but it must follow certain rules and must not mislead customers into thinking you are a limited company (for example, by including "Ltd" or "Limited"). Your business name cannot be offensive or identical to a registered trademark.

If you do trade under a business name, you must still display your own name on business documents such as invoices, letters, and your website.

What happens after you register?

Once registered, you will need to:

• Keep accurate records of all your income and expenses throughout the year, and keep proof of all records, including receipts

• File a Self Assessment tax return each year by 31 January (online) or 31 October (paper)

• Pay Income Tax on profits above £12,570 for 2024/25 and pay national insurance contributions, including Class 2 and Class 4, if applicable

• Consider whether you are eligible for the trading allowance or cash basis accounting

These records generally need to be kept for at least 5 years after the 31 January submission deadline.

Making Tax Digital will require eligible sole traders to keep digital records from 2026 and submit information through compatible software.

Sole trader vs limited company: which should you choose?

Most people starting out should begin as a sole trader. It is the simplest business structure for many freelancers and small business owners, and it is cheaper to run and requires less administration. Sole traders keep all profits after paying tax and have full control over business decisions and business operations. By contrast, a limited company is a separate legal entity that offers liability protection, whereas a sole trader is personally liable and has unlimited liability for business debts, which can put personal assets at risk. Sole traders can also have greater financial privacy because they do not usually need to publish financial information publicly, though some clients may see a limited company as more credible. As your income grows, it may make financial sense to incorporate. You may also choose to open a separate business bank account, although it is not a legal requirement. See our full guide to sole trader vs limited company for a detailed comparison.

Disclaimer

This guide provides general information only. It does not constitute tax or legal advice. For your specific situation, consult a qualified accountant or tax adviser. You can find an accountant through our directory.