Self-Employed-Registration

Registering as self-employed in the UK is a process that individuals must follow if they are starting a business or working for themselves.

Our qualified accountants provide professional advice and assistance with the complete self-employed registration process. Need help? Call us 0203 002 2027.

Steps to register as self-employed

Here are the key steps to register as self-employed:

1. Inform HM Revenue and Customs (HMRC)
2. Unique Taxpayer Reference (UTR)
3. Keeping Records
4. Self-Assessment Tax Return
5. Payment of Taxes
6. National Insurance Contributions
7. Registering for VAT (if applicable)

1. Inform HM Revenue and Customs (HMRC)

You need to let HMRC know that you are becoming self-employed. You can do this by registering online through the HMRC website or by calling the HMRC helpline. The registration process involves providing personal details, including your name, address, National Insurance number, and information about your business activities.

2. Unique Taxpayer Reference (UTR)

Once you have registered, HMRC will issue you a Unique Taxpayer Reference (UTR). This is a 10-digit number that identifies you for tax purposes. Make sure to keep your UTR safe as you will need it for filing tax returns and other communications with HMRC.

3. Keeping Records

As a self-employed individual, it is crucial to maintain accurate records of your income, expenses, and other business-related transactions. This includes invoices, receipts, bank statements, and any other relevant documents. Good record-keeping will help you complete your tax returns accurately and ensure compliance with HMRC requirements.

4. Self-Assessment Tax Return

Self-employed individuals are required to file a Self-Assessment tax return each year to report their income and calculate their tax liability. The tax return should include details of your business income, allowable expenses, and any other sources of income you may have. You can file your tax return online using HMRC’s online services or by using approved software.

5. Payment of Taxes

Self-employed individuals are responsible for paying their own income tax and National Insurance contributions. The tax liability is calculated based on the profits you make from your business activities. Payment deadlines for tax are typically January 31st for any tax owed from the previous tax year, and July 31st for the second payment on account (if applicable).

6. National Insurance Contributions

As a self-employed individual, you are also required to pay Class 2 and Class 4 National Insurance Contributions (NICs) alongside your income tax. Class 2 NICs are a flat weekly rate, while Class 4 NICs are calculated as a percentage of your profits.

7. Registering for VAT (if applicable)

If your business turnover exceeds the VAT threshold (currently £85,000), you may need to register for VAT. VAT registration is a separate process and has additional reporting and payment requirements.

It is important to familiarise yourself with HMRC guidelines, seek professional advice if needed, and ensure that you comply with your tax obligations as a self-employed individual in the UK.