I’ve updated this post on 12 June 2020
Whether you’ve already started working for yourself, want to make the ‘leap’ or plan to turn 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 and share the 5 steps you need to take and some advice about what you can expect to happen next, as well as your legal responsibilities once you are signed up as self-employed!
This guide is for individuals who want to register as self-employed. There are other business structures available such as Limited Company, Partnerships and LLPs. Not sure what business structure is right for you? Read this Guide.
Who Needs to Register as Self-Employed in the UK
First things first, 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.
A tax year runs from 6 April to 5 April.
That doesn’t mean you shouldn’t register if you are getting paid 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 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.
The Deadline for Registering as Self-Employed with HMRC
The deadline for r
The tax year runs from 6 April to 5 April.
So if you
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 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 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.
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 to be posted to you (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).
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:
- 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).
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.
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.
What Happens Once You Have Successfully Registered
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;
- Pay 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).
To stay prepared for taxes, you’ll need to do your bookkeeping. Check out my Bookkeeping Template if you want to DIY your taxes without the complexity of subscription-based softwares.
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.
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.
New Here? These are my most popular resources:
- The Ultimate Bookkeeping Spreadsheet – Organise your money, track the numbers that matter and stay on top of your cash;
- Freebies – templates, spreadsheets, calculators and cheat sheets. Here you’ll find all my freebies for the self-employed community, all in one place.
- Sole Trader or Limited Company? – Download my free calculator to check which business structure would help you to pay less tax;
- FREE Business Expenses Cheatsheet – Check what you can and can’t claim as an expense against your taxes.
- 6 Core Elements of Self-Employment Taxes – Confused by taxes? Worried you’re missing something when it comes to tax allowances and reliefs? These easy to follow 6 mini-guides will have you on top of the tax side of things in no time at all.