How to Register as a Sole Trader with HMRC

You must register as a sole trader with HMRC if you have earned, or expect to earn, more than 1,000 pounds from self-employment in a tax year. The registration deadline is 5 October following the end of the tax year in which you started trading. For example, if you did your first self-employed job in June 2025, you must register by 5 October 2026.\n\nIn practice, it is advisable to register much sooner than the deadline. Registering early ensures you receive your Unique Taxpayer Reference (UTR) number in good time, allows you to set up your Government Gateway account, and avoids the risk of forgetting and missing the deadline. Late registration can result in penalties and may delay your ability to file your tax return.\n\nYou need to register even if you are self-employed alongside an employed job. Many tradespeople start by doing weekend or evening work while still employed, and this side income must be declared through Self Assessment. Registering as a sole trader does not affect your employment status or your employer's PAYE obligations.\n\nIf you are unsure whether your activity counts as self-employment, the key indicators are that you control how, when, and where you work, you invoice customers directly, you provide your own tools and equipment, and you bear the financial risk of the work. Occasional favours for friends are not self-employment, but regular paid work for multiple customers almost certainly is.

The quickest way to register is online through HMRC's website. You will need a Government Gateway account, which you can create during the registration process if you do not already have one. You will also need your National Insurance number, your personal details including full name, date of birth, and address, and information about your business.\n\nThe online form asks for your business start date, the nature of your trade, your business name if different from your personal name, your business address, and your business telephone number. For tradespeople, the nature of your trade would be your specific trade such as plumbing, electrical installation, carpentry, or general building. Your business address is typically your home address if you work from a van.\n\nAfter submitting the online form, HMRC will process your registration and send your UTR number by post within ten working days, sometimes longer during busy periods around the Self Assessment deadline. Your UTR is a ten-digit number unique to you that you will use on all tax returns and correspondence with HMRC. Keep it safe as you will need it every year.\n\nYou will also receive an activation code for your online Self Assessment account, which allows you to file returns, view your tax position, and communicate with HMRC online. This code is sent separately and may take up to seven working days to arrive. Once activated, your online account is your primary portal for managing your self-employment tax affairs.

Once registered, HMRC will send you a notice to file a Self Assessment tax return for the tax year in which you started trading. This will arrive in the spring following the end of the tax year. For someone who registered during 2025/26, the first notice to file will arrive around April or May 2026, with the return due by 31 January 2027.\n\nYou should start keeping records from the date you began trading, not from the date you registered. All income and expenses from day one of your self-employment are relevant for your tax return. If you did jobs before registering, those need to be included. TradeTally lets you backdate entries to the start of your trading, so even if you set up the app after starting work, you can add historic invoices and expenses.\n\nConsider opening a separate business bank account at this stage if you have not already. While sole traders are not legally required to have a separate account, it makes record-keeping significantly easier and helps demonstrate to HMRC that your business finances are well-managed. Most high-street banks offer free or low-cost business accounts for sole traders.\n\nYou should also check whether you need to register for VAT (if your turnover will exceed 85,000 pounds), register for the Construction Industry Scheme (if you work as a subcontractor or engage subcontractors in construction), or take out any mandatory insurance for your trade. These are separate registrations from Self Assessment but may be required alongside it.

As a sole trader, you can trade under your own name or choose a business name. There is no registration process for a sole trader business name, unlike forming a limited company. However, if you trade under a name other than your own, you must display your personal name and business address on all business correspondence, invoices, and your website.\n\nYour business name cannot include terms like Limited, Ltd, LLP, or PLC, as these imply a different business structure. It also cannot be offensive or include sensitive words that require approval, such as Royal, British, or Authority. Beyond these restrictions, you are free to choose any trading name. Many tradespeople use a format like their name followed by the trade, such as Smith Plumbing Services or Jones Electrical.\n\nThe sole trader structure means there is no legal distinction between you and your business. You are personally liable for all business debts and obligations. This is the simplest business structure and is appropriate for most tradespeople starting out. You can always convert to a limited company later if your circumstances change.\n\nWhen registering with HMRC, you enter both your personal name and your trading name. Your UTR is issued in your personal name, and all tax liabilities are personal. Your trading name appears on your Self Assessment return but has no separate tax identity. This simplicity is one of the key advantages of operating as a sole trader.