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How to Register as Self Employed with HMRC

    I’ve updated this post on 6 April 2020

    So you’ve decided to be your own boss! Congratulations! The first big step you need to take is to register as self employed.

    Here’s how you can make things official with HMRC yourself and some advice about what you can expect to happen next, as well as your legal responsibilities.

    Do You Need to Register for Self Employment?

    First things first, it pays to check whether you actually need to register with HMRC because not everyone needs to.

    Avoiding an HMRC registration can save you a lot of hassle!

    Who Needs to be HMRC Registered?

    When you work for yourself you’ll need to let apply for self employment with HMRC once your business has a turnover (not profit) of £1,000 or more during a single tax year.

    A tax year runs from 6 April to 5 April.

    That doesn’t mean you shouldn’t register as self-employed (sole trader) if you are getting paid less than £1,000.

    In fact, many people choose to register anyway because they:

    • expect their turnover to increase beyond this;
    • don’t want to miss the registration deadline and avoid any potential HMRC penalties;
    • want to lock in a tax saving in future years by recording a tax loss to use against future profits.

    Actually, HMRC’s recommended approach is that everyone should register as self-employed once they start working for themselves, regardless of how much they get paid.

    The £1,000 exemption is really just designed for people who do odd jobs, babysitting or sell small amounts through eBay or car boot sales, for example, to top up their income.

    £1,000 Trading Income Allowance

    What is the Deadline to Register as Self Employed with HMRC?

    The deadline for registering as self-employed is the 5th October in your business’s second tax year.  

    The tax year runs from 6 April to 5 April.

    So if you started working for yourself on 1 March 2019, you’ll need to register by 5 October 2019.

    What Happens if You Miss the Deadline?

    You shouldn’t ignore the 5th October deadline because there are penalties for missing it, which can be up to 30% of your tax liability.

    How to Register as Self Employed in the UK

    Registering is simple enough to do yourself. The easiest way to do it is to either:

    • Go Online or;
    • Phone HMRC.

    How to Register Online

    Before you start registering as self-employed online, make sure you have your National Insurance number handy.

    You’ll then need to complete the following steps:

    1. Visit the HMRC website and choose the option to “Register Online”;
    2. Set up your HMRC online account so you can manage your taxes online;
    3. Enrol for self-assessment online;
    4. Wait for your UTR number to be posted to you (can take up to 10 days)
    5. Wait for your activation code so you can complete setup of your HMRC online account (can take 7 – 10 days).

    Need my help? Here’s my video guide to help you register as self-employed.

    How to Register by Phone

    You can apply to register as self-employed by phone if you call HMRC on 0300 200 3500.

    HMRC’s opening times are as follows:

    Monday to Friday: 8am to 8pm
    Saturday: 8am to 4pm

    How to Apply for Self Employment if You Are Already Registered for Self-Assessment

    If you already fill out a tax return for another reason, for example, because you are a landlord or have dividend income, then you should not apply for self-employment again.

    If you register again, HMRC will set you up on their system for a second time and expect two tax returns from you!

    Instead, you should complete a CWF1 Form online.

    What You’ll Need to Complete the CWF1 Form Online

    You’ll need certain information to complete the form online so that HMRC can tie up your application to the right person.

    Here’s what you need to have ready:

    How to Find the 2019/2020 CWF1 Form Online

    Head over to the HMRC website where you can find the latest version of the 2019/2020 CWF1 form online.

    It is fairly straightforward to fill out and you’ll be given the opportunity to review the form before you submit it.

    cwf1 form online

    What Happens Once You Are Registered as Self Employed in the UK

    Once you have successfully applied for self employment you’ll receive a UTR number to make it official.

    You’ll need to follow the rules of self assessment, which means, in summary, you’ll be required to:

    • Work out your own taxes;
    • Paying Income Tax as well as Class 2 & Class 4 National Insurance on your business profits;
    • Completing a self assessment tax return online by 31 January each year and paying any tax due;
    • Make a payment on account depending on your earnings (this is a contribution towards your next years tax bill).

    Wrapping Up

    Congratulation on taking your first steps to being officially self employed! Trust me, you are going to love it!

    I’ve been self employed for many years now and, even though it has come with its ups and and downs, I wouldn’t look back.

    I’d love to connect with you in my Facebook Group Tax Help for the Self Employed and hear more about you and your business.

    FAQs

    How Long Does it Take for HMRC to Process Your Application?

    HMRC’s guidance says the self-employment registration process takes 7 – 10 days to complete. However, there can be delays with this timescales.

    To get an up to date estimate of how long your application will take you can call HMRC on 0300 200 3310.

    You’ll need to wait for two things:

    • An activation code to complete the setup of your HMRC Government Gateway account;
    • A UTR number that completes your registration.

    How to Contact HMRC About Your Application

    If you have a question about your application or think you have made a mistake then you should call HMRC on 0300 200 3310.

    What is a Government Gateway Account?

    Your Government Gateway Account is your online HMRC portal where you can:

    When you set up your government gateway account you’ll be issued with a User ID from HMRC and be asked to setup a password. Here’s what you can do if you have lost your user ID or password.

    Anita Forrest
    About Anita Forrest

    Anita is a Chartered Accountant with over a decade of working with small business owners. She is the creator of the ‘Go Self Employed’ website, where she simplifies complicated self-employment topics such as taxes, bookkeeping, banking and insurance.