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If you started working for yourself in 2025-26, you should have told HMRC by 5 October 2026. Register now: if all your 2025-26 tax is paid by 31 January 2027, there is no failure to notify penalty.
Registering late can be put right. The penalty for it is based on tax left unpaid, not on the number of days you were late. This page covers the late part. The full how-to is on how to register for Self Assessment. It follows GOV.UK, HMRC's Compliance Handbook and the law as checked on 17 October 2026.
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The deadline and who it applies to
The law (section 7 of the Taxes Management Act 1970) gives you 6 months from the end of the tax year to tell HMRC you owe Income Tax. The tax year ends on 5 April, so the deadline is 5 October. If you started trading in 2025-26, that was 5 October 2026. If you start during 2026-27, it is 5 October 2027.
You must register as a sole trader if you earn more than £1,000 in a tax year, before expenses. If your gross trading income is £1,000 or less, GOV.UK says you do not need to tell HMRC, unless an exception applies, such as wanting to claim a loss.
How the failure to notify penalty works
The penalty comes from Schedule 41 of the Finance Act 2008. It is a percentage of the "potential lost revenue", which for a late registration is the tax still unpaid on 31 January after the tax year. If nothing is unpaid on that date, there is nothing to work a penalty out on. GOV.UK puts it simply: if you register after 5 October and do not pay all of your tax bill by 31 January, you may get a penalty.
The percentage depends on why it happened and whether you came forward yourself (unprompted) or after HMRC got in touch (prompted).
| Why you were late | You told HMRC first | HMRC contacted you first |
|---|---|---|
| Not deliberate, HMRC knows within 12 months of the tax going unpaid | 0% to 30% | 10% to 30% |
| Not deliberate, 12 months or more | 10% to 30% | 20% to 30% |
| Deliberate | 20% to 70% | 35% to 70% |
| Deliberate and concealed | 30% to 100% | 50% to 100% |
Where you land within each range depends on how fully you tell HMRC, help it work out the tax and give access to your records. If the failure was not deliberate and you had a reasonable excuse, there is no penalty, as long as you put it right without unreasonable delay once the excuse ended. Lack of money only counts if it came from events outside your control.
A worked example
Sam, a self-employed tiler, started in June 2025. His 2025-26 tax comes to £1,800. He missed 5 October 2026 and registers on 20 October 2026.
| What Sam does | Failure to notify penalty |
|---|---|
| Pays all £1,800 by 31 January 2027 | None: nothing was unpaid on 31 January |
| Pays £1,200 by 31 January and £600 on 15 March 2027 | Up to 30% of £600, so £0 to £180, as he came forward himself within 12 months |
| Never registers, and HMRC first finds out when it writes to him in spring 2028 | 20% to 30% of £1,800, so £360 to £540, if it was not deliberate |
In the second case HMRC knew about Sam from when he registered, well within 12 months of the tax going unpaid, so the penalty can be as low as nil. He also pays interest on the £600 from 31 January, at 7.75% a year (the rate on 17 October 2026), and a 5% late payment penalty because it was still unpaid 30 days after the due date. In the third case, interest and late payment penalties of 5% at 30 days, 6 months and 12 months apply to the whole £1,800 as well.
What this means for you
If you are late, registering now and paying the full 2025-26 bill by 31 January 2027 keeps the failure to notify penalty at nil. Your online return is due by 31 January 2027 too, unless HMRC's notice to file is dated after 31 October 2026. Then you get 3 months from the date of the notice, and GOV.UK says HMRC's letter or email will give you the date. The payment date does not move.
On National Insurance, Class 2 is treated as paid if your profits reach the small profits threshold: £6,845 for 2025-26 and £7,105 for 2026-27. Below it, you can choose to pay it voluntarily.
Late filing penalties, which start at £100, are separate and are covered on what happens if you file your tax return late.
If you should have registered in earlier years too, register now and use HMRC's digital disclosure service. You notify HMRC first, then have 90 days from its acknowledgement to send the disclosure and pay. HMRC's guide says penalties are usually lower if you tell it yourself.
Steps to take now
- Register as a sole trader on GOV.UK. You need your National Insurance number.
- Wait for your Unique Taxpayer Reference (UTR), a 10-digit number that usually arrives by post around 15 days later.
- Gather your income and costs since you started, and work out your 2025-26 profit.
- File your return by the deadline HMRC gives you, and pay everything by 31 January 2027.
- If anything is left unpaid, tell HMRC yourself before it asks, and say why you were late.
- If your self-employment and property income before costs was over £30,000 in 2025-26, Making Tax Digital starts for you on 6 April 2027. Use the free MTD check to confirm.
More guides for sole traders are in the trades section.
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Questions people ask
Will I definitely get a penalty for registering late?
No. GOV.UK says you may get a failure to notify penalty if you register after 5 October and do not pay all of your tax by 31 January. The penalty is worked out on the tax still unpaid on that date, so if everything is paid by 31 January there is nothing to base it on.
How much is the failure to notify penalty?
It is a percentage of the tax left unpaid on 31 January after the tax year. If the failure was not deliberate the most it can be is 30%, and it can be cut to nothing if you tell HMRC yourself and HMRC knows within 12 months of the tax going unpaid. A deliberate failure can be up to 70%, or 100% if it was also concealed.
When is my first tax return due if I register after 5 October 2026?
An online return for 2025-26 is due by 31 January 2027, unless HMRC's notice to file it is dated after 31 October 2026. Then the law gives you 3 months from the date of the notice, and GOV.UK says HMRC's letter or email will tell you the date. Because you registered late, the tax is still due by 31 January 2027.
Do I need to register if I only earned a few hundred pounds?
Usually not. If your gross trading income is £1,000 or less in the tax year, GOV.UK says you do not need to tell HMRC, unless an exception applies, such as wanting to claim a loss or pay voluntary Class 2 National Insurance.
I should have registered a few years ago. What do I do?
HMRC's digital disclosure service is for telling it about income from earlier years. You notify HMRC first, then have 90 days from its acknowledgement to send the disclosure and pay. HMRC says penalties are usually lower when you tell it yourself.
Does registering late hold up Making Tax Digital?
To sign up for Making Tax Digital you must be registered for Self Assessment and have sent a tax return in the last 2 years, so registering and filing your 2025-26 return comes first. If your 2025-26 income from self-employment and property was over £30,000 before costs, you need to use it from 6 April 2027.
Sources
- Self Assessment tax returns: Penalties (GOV.UK)
- Self Assessment tax returns: Deadlines (GOV.UK)
- Check how to register for Self Assessment (GOV.UK)
- Become a sole trader: Register as a sole trader (GOV.UK)
- Finance Act 2008, Schedule 41: penalties for failure to notify (legislation.gov.uk)
- Taxes Management Act 1970, section 7: notice of liability to income tax (legislation.gov.uk)
- Taxes Management Act 1970, section 8: return filing dates (legislation.gov.uk)
- Taxes Management Act 1970, section 59B: payment date (legislation.gov.uk)
- Compliance checks: penalties for failure to notify, CC/FS11 (GOV.UK)
- CH73200: Maximum and minimum penalties for each type of behaviour (HMRC Compliance Handbook)
- CH73180: Non-deliberate failure disclosed within 12 months (HMRC Compliance Handbook)
- Tax-free allowances on property and trading income (GOV.UK)
- HMRC interest rates for late and early payments (GOV.UK)
- Self-employed National Insurance rates (GOV.UK)
- Your guide to making a disclosure (GOV.UK)
- Find your Unique Taxpayer Reference (GOV.UK)
- Find out if and when you need to use Making Tax Digital for Income Tax (GOV.UK)
- Sign up your business for Making Tax Digital for Income Tax (GOV.UK)
This is general information to help you understand the rules. It isn't tailored to your circumstances, so check your own position before acting on it.
Righto Tax is a trading name of NJG Consultancy Ltd, registered in England and Wales, company number 16095900. Registered office: Jubilee House, East Beach, Lytham St Annes, FY8 5FT.
What happens next
- Use the free Making Tax Digital checker to see your own start date and deadlines.
- See what Righto Tax for Trades does for you, and join the waitlist.
- Questions about this page? Email hello@rightotax.co.uk.