Guide

Set up as a sole trader

Last updated: 19 September 2017

Register

Register as soon as you can after starting your business. At the latest, you should register by 5 October in your business's second tax year.

Example

If you start working as a sole trader between April 2016 to March 2017, you should register before 5 October 2017.

If you register later than this, you won't get a penalty as long as you send your Self Assessment tax return and pay your bill on time.

How to register

This depends on your circumstances.

New sole trader who's not sent tax returns before

Tell HM Revenue and Customs (HMRC) you want to be a sole trader by registering as a new business. You'll register for Self Assessment tax returns and Class 2 National Insurance at the same time.

You'll then be able to report your self-employment income through a tax return after the end of each tax year.

New sole trader who's sent tax returns before

You may have sent Self Assessment tax returns before as an individual, eg for rental or investment income.

You now need to register as self-employed and for Class 2 National Insurance using form CWF1. You can keep your existing Self Assessment account.

You need your 10-digit Unique Taxpayer Reference (UTR) from when you registered for Self Assessment, so HMRC can link your accounts.

You can find your UTR on previous tax returns, your online account or other documents from HMRC. If you can't find it, call the Self Assessment helpline.

Former sole trader who wants to start up again

You need to re-register using form CWF1. You'll need your UTR for the same reasons as new sole traders already in Self Assessment.

How long it takes

Allow 10 working days to complete the registration process because HMRC needs to post you an activation code. You'll be prompted for this when you first log in to your online account (also known as a Government Gateway account).

Allow 21 days if you're abroad.

Set up as a sole trader
Register