TL;DR: To register as a sole trader in the UK, sign in to or create a Government Gateway account on GOV.UK and register for Self Assessment as a self-employed person. The deadline is 5 October following the end of the tax year in which the self-employment started (so self-employment beginning during 2025-26 must be registered by 5 October 2026). Registration is free. HMRC issues a Unique Taxpayer Reference (UTR) by post within around 10 working days. The trader is then in Self Assessment and must file an annual return by 31 January (online) for the previous tax year. Late registration triggers HMRC's "failure to notify" penalties. From 6 April 2026, traders with combined trading and property income above 50,000 pounds must also comply with Making Tax Digital for Income Tax Self Assessment.
Last reviewed May 2026
Registering as a sole trader with HMRC is one of the simplest pieces of official paperwork a new business owner has to do. The whole process can be done online in around 30 minutes once the supporting information has been gathered, and there is no fee. The challenge is not the process itself but knowing exactly what HMRC needs, when to register, and what happens immediately afterwards.
This guide walks through the registration step by step, the supporting documents and details to have ready, the deadlines that apply, the penalties for late registration, what happens after the UTR arrives, and the related registrations (VAT, PAYE if hiring staff, Making Tax Digital) that some sole traders also need.
The single most important deadline
The legal deadline for registering as a sole trader is 5 October following the end of the tax year in which the self-employment started. A trader who started self-employment at any point between 6 April 2025 and 5 April 2026 must register with HMRC by 5 October 2026.
This deadline is set by section 7 of the Taxes Management Act 1970 (the "notice of liability" rule) which requires anyone with new untaxed income to notify HMRC by 5 October following the tax year. For self-employment, the start date is the date trading began, not the date the trader thought about starting or made preparations.
In practice it is sensible to register as soon as self-employment income becomes regular, rather than waiting until close to the deadline. Earlier registration means earlier UTR delivery, earlier access to the online Self Assessment account, and lower risk of forgetting and missing the deadline.
What HMRC counts as "starting" self-employment
HMRC's test is whether the activity amounts to trading rather than a hobby. The "badges of trade" considered include: frequency of transactions, intention to make a profit, organisation and method, length of ownership of any assets sold, and similarity to trade activity. A one-off sale of personal items is not trading. A regular activity carried on for profit (selling goods, providing a service, freelancing) is trading.
The trading allowance of 1,000 pounds gives a tax-free buffer: gross trading income up to 1,000 pounds in a tax year is exempt from income tax and does not need to be reported. Trading income above 1,000 pounds must be reported, with the option either to deduct allowable expenses or to claim the 1,000 pound trading allowance against gross income (whichever gives the lower taxable profit).
Registration as a sole trader is required where the trading income is above 1,000 pounds, or where the trader voluntarily wants to be in Self Assessment to record losses, pay voluntary Class 2 NI, or for other reasons. Below the 1,000 pound allowance, registration is not required.
The information you need to register
Before starting the online registration, gather: National Insurance number; full name as it appears on official documents; date of birth; current address; date the self-employment started (day, month, year); a description of the business activity (a short free-text description plus a Standard Industrial Classification code if known); the trading name (if different from the personal name) and trading address (if different from the home address); and email and phone contact details.
The trader also needs a Government Gateway account. A new account can be created at the start of the registration process; existing accounts (for example from filing PAYE returns as an employee or using the personal tax account) can be re-used. The Government Gateway account requires two-factor authentication and identity verification.
For traders already in Self Assessment for another reason (e.g. high income, property income, dividends), the registration is simpler: instead of creating a new Self Assessment record, the trader uses form CWF1 to add self-employment to the existing record. The CWF1 form is also online via GOV.UK.
The registration process step by step
Step 1: Go to "Register for Self Assessment if you are self-employed" on GOV.UK. The page is publicly indexed and easy to find by searching for the page title.
Step 2: Sign in to (or create) the Government Gateway account. New users go through identity verification, typically using a UK passport, driving licence, or one of the alternative verification methods. Existing users sign in with their Government Gateway user ID and password.
Step 3: Complete the online registration form. The form asks for the personal details listed above, the business details, and the date trading started. The form usually takes 10 to 20 minutes if the information is to hand.
Step 4: Submit the registration. HMRC acknowledges receipt online and confirms the submission. The acknowledgement is not the UTR; that arrives separately.
Step 5: Wait for the UTR. HMRC posts the UTR to the trader's address within around 10 working days. The UTR is a 10-digit number used on every Self Assessment return and HMRC correspondence going forward. The trader should keep the UTR safe and accessible.
Step 6: Activate the online Self Assessment account. HMRC sends a separate activation code by post for the online Self Assessment service. The trader enters the activation code at the prompt in their personal tax account to enable online filing.
What happens if you register late
Late registration is treated under HMRC's "failure to notify" penalty regime in Schedule 41 of the Finance Act 2008. The penalty is calculated as a percentage of the "potential lost revenue" (the income tax and NI that should have been paid by the relevant deadline).
The standard percentages are: up to 30 percent for non-deliberate late registration; up to 70 percent for deliberate but not concealed; and up to 100 percent for deliberate and concealed. The actual figure is reduced for cooperation, disclosure, and quality of response. An unprompted disclosure (before HMRC begins enquiring) attracts the lowest penalty within the band.
In addition to the penalty, interest runs on any unpaid tax from the date it should have been paid. For self-employed traders the income tax and Class 4 NI for a tax year is due on 31 January following the end of the tax year, so interest can accumulate if the registration and tax payment are very late.
A trader who has missed the 5 October deadline should still register as soon as possible, ideally before HMRC contacts them. The penalty reduction for prompt unprompted disclosure is substantial, often bringing the effective penalty down significantly.
After registration: what comes next
The first Self Assessment return is filed for the tax year in which self-employment started. The return covers the period from the start date to the following 5 April. The online filing deadline is 31 January following the tax year end (so a 2025-26 return is due by 31 January 2027). The paper deadline is 31 October.
The trader must also pay the income tax and Class 4 NI due on the return by 31 January. From the second tax year onwards, payments on account may apply: where the previous year's tax bill exceeded 1,000 pounds, two payments on account are required (31 January and 31 July), each equal to 50 percent of the previous year's tax. This can be a cash-flow surprise in the second year of trading.
The trader should keep records of all business income and expenses for at least 5 years after the 31 January submission deadline for the relevant tax year. Records can be on paper, in spreadsheets, or in accounting software. From the start of Making Tax Digital for Income Tax (April 2026 for those above 50,000 pounds combined trading and property income; April 2027 above 30,000 pounds), the records must be digital and quarterly updates must be sent to HMRC using approved software.
Related registrations
VAT registration is required if VAT-taxable turnover exceeds 90,000 pounds in any rolling 12-month period (the threshold from 1 April 2024), or if turnover is expected to exceed 90,000 pounds in the next 30 days alone. VAT registration is separate from Self Assessment and is also done online through GOV.UK.
Hiring staff requires the trader to register as an employer with HMRC and operate PAYE. The employer registration is separate again and produces a separate PAYE reference number. Most sole traders running a one-person business do not need employer registration; it is only required from the point of hiring an employee.
The Construction Industry Scheme (CIS) applies to traders in construction. A sole trader working in construction may need to register under CIS either as a subcontractor (to receive payments with the right tax deduction) or as a contractor (to deduct tax from payments to subcontractors).
Data Protection Act registration with the Information Commissioner's Office may apply where the trader processes personal data for business purposes beyond core staff records. Most sole traders pay an annual fee under the data protection fee regime if they handle customer or marketing data.
How we verified this
The deadlines, process, and penalty rules described here are drawn from section 7 of the Taxes Management Act 1970 (notice of liability), Schedule 41 of the Finance Act 2008 (failure to notify penalties), HMRC's published Self Assessment registration guidance on GOV.UK, and HMRC's published guidance on Making Tax Digital for Income Tax. The VAT threshold of 90,000 pounds is the rate from 1 April 2024. The trading allowance of 1,000 pounds and the small profits threshold for NI are the statutory amounts for 2025-26. No invented HMRC reference numbers, trader details, or specific case figures have been used.
Disclaimer: This article is general information about registering as a sole trader in the UK. It is not personal tax or business advice. Specific arrangements depend on the individual trader's circumstances. Anyone setting up a new business should consider taking advice from a qualified accountant, particularly on the choice between sole trader and limited company structures and on VAT and PAYE obligations.
Frequently asked questions
How do I register as a sole trader in the UK?
Sign in to or create a Government Gateway account on GOV.UK, then complete the online registration for Self Assessment as a self-employed person. The registration asks for personal details (NI number, name, date of birth, address), business details (trading name if any, trading address, business activity), and the date the self-employment started. HMRC issues the Unique Taxpayer Reference (UTR) by post within around 10 working days.
What is the deadline to register as a sole trader?
The deadline is 5 October following the end of the tax year in which the self-employment started. For self-employment beginning between 6 April 2025 and 5 April 2026, the registration deadline is 5 October 2026. Late registration triggers HMRC's failure-to-notify penalties under Schedule 41 of the Finance Act 2008.
Is there a cost to register as a sole trader?
No. Registration with HMRC for Self Assessment as a sole trader is free. The trader pays income tax and Class 4 National Insurance on the profits through the annual Self Assessment return, but the registration itself has no fee. There is also no cost to register a trading name (sole traders do not register at Companies House).
Do I need to register if I am only earning a small amount?
Trading income up to 1,000 pounds in a tax year is covered by the trading allowance and does not need to be reported or registered. Trading income above 1,000 pounds requires registration and reporting through Self Assessment. Voluntary registration is allowed below the threshold for traders who want to be in Self Assessment for other reasons.
What happens after I receive my UTR?
The UTR is used on the annual Self Assessment return and on HMRC correspondence. Activate the online Self Assessment account using the separate activation code HMRC sends by post. Keep records of all business income and expenses. File the first Self Assessment return online by 31 January following the end of the tax year in which trading started, and pay the income tax and Class 4 NI due. From April 2026 onwards, also check whether Making Tax Digital for Income Tax applies.
