How to Register as a Sole Trader with HMRC

Starting your own business as a sole trader is one of the simplest and most popular routes for UK entrepreneurs. To operate legally and pay the right taxes, you need to register with HM Revenue & Customs (HMRC) for Self Assessment. This guide explains how to register as a sole trader, important deadlines, what happens next, and the records you’ll need to keep to stay compliant.

How to Register as a Sole Trader with HMRC

If you decide to operate as a sole trader, you must register with HMRC so they know you’re self-employed and can send you the necessary tax forms. Registration is free and straightforward, done online via the GOV.UK website.

Here’s how to register:

1. Create a Government Gateway account: This is HMRC’s online portal for managing your tax affairs.
2. Complete the online registration for Self Assessment: Choose the option to register as a sole trader.
3. Provide your personal details: Including your National Insurance number, contact information, and business start date.
4. Submit your registration: Once submitted, HMRC will confirm your registration and send you a Unique Taxpayer Reference (UTR) within 10 working days.

It’s important to register as soon as you start trading or within three months of your business start date to avoid penalties.

Important Deadlines for Sole Traders

Registering on time is crucial to avoid fines and ensure you meet your tax obligations smoothly. Here are the key deadlines to remember:

• Register for Self Assessment: By 5 October following the end of the tax year in which you started trading. For example, if you started in the 2025/26 tax year (6 April 2024 to 5 April 2026), register by 5 October 2025.
• Submit your Self Assessment tax return: By 31 January after the end of the tax year (e-filing deadline). For the 2025/26 tax year, this is 31 January 2026.
• Pay your tax bill: By 31 January following the tax year, with a possible second payment on account by 31 July.

Late registration or late tax return submissions can attract penalties, so keeping to these dates is essential.

£200

Free cash when you open & spend

Ready to open your business bank account?

Open a Tide business account free and get up to £200 cash — use Tide referral code REFER200 when signing up or click the link below. Takes under 5 minutes, no credit check.

REFER200

Click to copy code Claim £200 Free →

Read our full Tide review →

*T&Cs apply. Affiliate link.

What Happens After You Register?

Once you register, HMRC will send you a Unique Taxpayer Reference (UTR) by post. This 10-digit number is important – you’ll use it every time you file your Self Assessment tax return or communicate with HMRC about your business.

You’ll also receive a letter explaining your obligations, including how and when to file your tax return. HMRC won’t send you a tax return automatically; you’ll need to file online each year via the Government Gateway.

Setting Up Your Online Account

After registration, it’s a good idea to set up your online HMRC account if you haven’t already. This portal lets you:

• Submit your annual Self Assessment tax return;
• Check your tax liabilities and payments;
• Update personal details and business information;
• Manage payments on account and set up payment plans if needed.

Keep your login details safe and ensure you check your account regularly for updates or messages from HMRC.

Record-Keeping Requirements for Sole Traders

Good record keeping is essential for managing your taxes and running your business properly. HMRC requires you to keep accurate records of your income and expenses to complete your Self Assessment return accurately.

Here’s what you need to keep:

• Sales invoices and receipts;
• Business expense receipts and invoices;
• Bank statements for your business account;
• Records of any assets you buy or sell;
• Details of any business mileage or travel costs;
• Copies of your completed tax returns and correspondence with HMRC.

Records must be kept for at least five years after the 31 January submission deadline of the relevant tax year. For example, records for 2025/26 must be kept until at least 31 January 2031.

Tips for Managing Your Tax Affairs as a Sole Trader

Keeping your tax affairs in order from the start can save you time, money, and stress. Here are some practical tips:

• Separate your business finances: Use a dedicated business bank account to keep income and expenses clear.
• Use accounting software: Simple bookkeeping tools like QuickBooks, Xero, or FreeAgent can help track your finances and prepare for tax returns.
• Set aside money for tax payments: Aim to put aside around 25-30% of your profits for tax and National Insurance contributions.
• Keep receipts organised: Whether digitally or in paper form, organised records make filing easier and reduce errors.
• Consider professional advice: An accountant can help optimise your tax position and ensure compliance.

For more on choosing the right business structure, see our guide on Sole Trader vs Limited Company.

Key Takeaways

• Register as a sole trader with HMRC by 5 October following the tax year you start trading.
• You’ll need to file an annual Self Assessment tax return and pay any tax due by 31 January.
• Keep detailed records of all business income and expenses for at least five years.
• Set up a Government Gateway account to manage your tax online.
• Consider using accounting software and opening a separate business bank account to simplify your finances.