How do I register as a sole trader with HMRC?

You register as a sole trader by registering for Self Assessment with HMRC. You must do it if you earn more than £1,000 in a tax year. If you started in 2026-27, register by 5 October 2027.

You can start work straight away. Registering tells HMRC you are self-employed, gives you a Unique Taxpayer Reference (UTR) and means you will send a tax return each year. HMRC then works out your Income Tax and National Insurance from your profits.

When you must register

GOV.UK says you must register as a sole trader if you:

• earn more than £1,000 in a tax year, which runs from 6 April to 5 April
• need to prove you are self-employed, for example to claim Tax-Free Childcare
• want to pay voluntary Class 2 National Insurance to help you qualify for benefits and the State Pension
• need to register as a subcontractor under the Construction Industry Scheme (CIS)

If you are already registered for Self Assessment for another reason, such as rental income, you still need to register again as a sole trader.

Key dates

If you register after 5 October 2026 for the 2025-26 year, GOV.UK says HMRC will give you a filing deadline 3 months from the date of its letter or email. You must still pay by 31 January 2027. Registering late, or not at all, can mean a penalty.

What you need

You need a National Insurance number. If you do not have one, you can apply for one first. You will also be asked for details about you and your business, such as what you do and when you started. You can trade under your own name or choose a trading name.

Steps to register as a sole trader

1. Check you are self-employed and not an employee. GOV.UK has an employment status checker if you are not sure.
2. Choose your business name: your own name or a trading name.
3. Start keeping records of every sale and every cost from day one.
4. Use GOV.UK's "Check how to register" tool for Self Assessment as a sole trader. Have your National Insurance number ready.
5. If you work in construction for contractors, choose "working as a subcontractor" when asked. GOV.UK says this registers you for Self Assessment and CIS at the same time.
6. Wait for your UTR. HMRC's reply-time tool shows how long registrations are currently taking.
7. Keep an eye on your turnover. If it goes over £90,000 in any 12 months, you must register for VAT.

What this means for you

For trades, registering early pays off. A contractor can only deduct CIS at 20% rather than 30% once you are registered for CIS, and you need a UTR to register online.

Set money aside from the start. For 2026-27, outside Scotland, Income Tax is 20% on profits between £12,571 and £50,270, and Class 4 National Insurance is 6% on profits between £12,570 and £50,270. Your first bill is due by 31 January after the tax year ends. Payments on account towards the next year can be due on the same day.

Making Tax Digital comes next

Making Tax Digital for Income Tax (MTD) applies to sole traders and landlords registered for Self Assessment. Whether it applies to you depends on your qualifying income, which is your turnover before costs on the tax return from two years earlier.

• Over £50,000 on your 2024-25 return: MTD from 6 April 2026.
• Over £30,000 on your 2025-26 return: MTD from 6 April 2027.
• Over £20,000 on your 2026-27 return: MTD from 6 April 2028.

So if you start in 2026-27, your first tax return decides whether you join MTD in April 2028. Use the free MTD check once you know your figures, and the trades section for guides on CIS, VAT and software.