So you’ve decided to work for yourself and be your own boss! Congratulations! The first big step you need to take is to register as self-employed in the UK.
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 as Self-Employed?
Not everyone needs to register with HMRC when they work for themselves.
It’s worth checking whether you need to do it because it will save you a lot of hassle and mean you can take advantage of a tax saving.
Who Needs to Register?
When you choose to work for yourself you’ll need to let HMRC know that you are self-employed 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 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 record 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.
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.
What is the Deadline to Register as Self-Employed in the UK?
The deadline to r
The tax year runs from 6 April to 5 April.
So if you
What Happens if You Miss the Deadline to Register as Self Employed
You shouldn’t ignore the 5th October deadline.
There are penalties for missing this deadline, 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:
- 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.
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 Happens Once You Are Registered as Self-Employed in the UK
Once you have successfully registered as self-employed you will 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).
What is a Government Gateway Account?
Your Government Gateway Account is your online HMRC portal where you can:
- Manage all your taxes;
- Receive messages and reminders from HMRC;
- Apply for additional taxes like VAT;
- Register online as a subcontractor under the CIS scheme;
- View your entitlement to the state pension;
- Find your UTR number;
- Complete your self-assessment tax return online.
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.
Updated 30 July 2019