Whether you’ve already started working for yourself, want to make the ‘leap’ or are eager to set up a business by turning a hobby into a fully-fledged business, then I’m sure that the thought of how to register as self-employed is lurking somewhere at the back of your mind!
In this guide, I’ll show you how you can make things official with HMRC. In addition, I’ll share the 5 steps you need to take and some advice about what you can expect to happen next. I’ll also outline your legal responsibilities once you are signed up to become self-employed when you register with HMRC.
This guide is written for individuals who want to register as UK self-employed. There are other business structures available such as Limited Company, Partnerships and LLPs and you can find out more about these in this guide ‘what business structure is right for you‘.
Updated 26 January 2022
Table of contents
- 1. Who Needs to Register as Self-Employed in the UK
- 2. When To Register as Self-Employed
- 3. Information You Need To Have Ready
- 4. How to Register as Self Employed in the UK
- 5. Applying for Self Employment if You Are Already Registered for Self-Assessment (CWF1)
- 6. How Long Does it Take for HMRC to Process Your Application
- 7. What Happens Next
- 8. Contacting HMRC About Your Application
- 9. Key Takeaways
Friendly Disclaimer: Whilst I am an accountant, I’m not your accountant. The information in this article is legally correct but it is for guidance and information purposes only. Everyone’s situation is different and unique so you’ll need to use your own best judgement when applying the advice that I give to your situation. If you are unsure or have a question be sure to contact a qualified professional because mistakes can result in penalties.
1. Who Needs to Register as Self-Employed in the UK
Firstly, it pays to check whether you actually need to register with HMRC because not everyone needs to. Avoiding registering can save you a lot of hassle! When you work for yourself you’ll need to apply for self employment once your business income (not profit) is £1,000 or more during a single tax year.
That doesn’t mean you shouldn’t register if you are earning less than £1,000. In fact, many people choose to apply 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 for self assessment once they start working for themselves. This is regardless of how much you earn. The £1,000 exemption is really just designed for people who do odd jobs, such as babysitting or sell small amounts through eBay or car boot sales, for example.
2. When To Register as Self-Employed
The deadline to r
3. Information You Need To Have Ready
Registering with HMRC will be easier if you have the information you need to hand. Here’s what you should have:
- Date of Birth
- UK Address
- National Insurance Number
- Telephone number
- Email address
- Business start date
- A brief description of what you do
4. How to Register as Self Employed in the UK
Registering is simple enough to do yourself and once completed you’ll expect to:
- Get a UTR number, by post
- Receive an activation code to enter into your government gateway account so you can file your SA100 tax return, also by post
But let’s start at the beginning. The easiest way to apply it is to either:
- Go Online or;
- Phone HMRC.
4.1 How to Register Online
Before you start applying online, make sure you have your National Insurance number handy. You’ll then need to complete the following 5 steps:
- Visit the HMRC website and choose the option to “Register Online”;
- Set up your HMRC online account so you can manage your taxes online;
- Enrol for self assessment online;
- Wait for your UTR number which is posted to you. This can take up to 10 days.
- Wait for your activation code so you can complete setup of your HMRC online account (can take 7 – 10 days).
5 Steps to Registering as UK Self-Employed
- Visit the HMRC website
Head over to the HMRC website and choose the option to “Register Online”
- Set Up a Government Gateway Account
This is the account where you’ll manage all your taxes. HMRC will automatically generate a 12 digit number which you’ll need to user as your login and let you choose a password.
- Enrol for Self Assessment
Complete the HMRC form to register for HMRC taxes. You’ll need to share your personal information, details about the work you will do once you are set up as self employed and make a declaration that everything you have entered it true.
- Wait for HMRC to Review Your Application
HMRC will review your application once you submit it. Within the next 10 days they will send you out a UTR number to be posted to you (can take up to 10 days). It’s a 10 digit ID number that you’ll need to keep safe in the event you need to prove you are a sole trader, speak with HMRC and manage your self employed taxes.
- Enter Your Activation Code
Finally, you’ll also be sent an activation code for your government gateway account as part of the verification process. It can take up to 28 days for this to be sent but make sure you enter it as soon as you receive it because it will expire.
- What Happens Next
4.2 How to Register by Phone
You can apply to register as self-employed by phone by calling HMRC on 0300 200 3500. HMRC’s opening times are as follows:
- Monday to Friday: 8am to 8pm
- Saturday: 8am to 4pm
5. Applying for Self Employment if You Are Already Registered for Self-Assessment (CWF1)
If you already fill in 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.
5.1 Completing 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:
- National Insurance Number;
- UTR number (here’s how you can find your UTR number).
- Personal details (name, address and phone number);
- Details of the business (name, address, the type of work).
5.2 How to Find the 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 have the opportunity to review the form before you submit it.
6. 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 these 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.
7. What Happens Next
Once you have successfully applied for self-employment, you’ll receive a UTR number to make it official and you’ll need to follow the rules of self-assessment. This includes tracking your income and expenses, filling in a tax return and paying tax on your earnings. You can read more about what you need to do in my beginners guide to going self-employed. It contains more information on registration, bank accounts and reporting your earnings along with other useful info you need to know as you embark on your journey to be your own boss.
8. Contacting 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.
9. Key Takeaways
- The deadline to register with HMRC as UK self-employed is 5th October following the end of the tax year you started working for yourself;
- You can apply for your self employment registration online or by phone. Either way, you’ll need to wait for your UTR number and activation code. These are posted to you to complete your registration;
- If you’re already registered for self assessment for another reason then you’ll need to complete a CWF1 form instead of completing a full application otherwise HMRC will expect two tax returns from you.
- Am I Considered Self-Employed?
- The Trading Income Allowance Explained
- HMRC Self Assessment Explained
- Self-Employed Tax Explained
- Self Employed Expenses Explained
Taxes are changing! From April 2024 sole traders will need to report their earnings and pay tax on a quarterly basis. This is known as Making Tax Digital, which you can read more about in this guide to help you get prepared.