How do I register as a sole trader?

You register as a sole trader by telling HMRC (HM Revenue & Customs, the UK tax authority) that you need to file a Self Assessment tax return — a yearly tax return where you report your income and expenses. You must do this if you earn more than £1,000 from self-employment in a tax year, and the deadline is 5 October after the end of the tax year you need to report (GOV.UK, checked 2 October 2026).

This guide is for you if you have started earning from a trade, a service or a side project on your own, or you are about to. It walks through whether you need to register, when to do it, what it costs, what happens next, and the tax you will pay once you are registered.

Do I need to register as a sole trader?

Yes, if you earn more than £1,000 from self-employment in a tax year — a tax year runs from 6 April to 5 April (GOV.UK, checked 2 October 2026).

A sole trader is one person running a business on their own. You can start trading straight away; there is no registration you have to finish before your first sale (GOV.UK, checked 2 October 2026). Registering is about tax, not permission. It tells HMRC you need to report your self-employed income each year.

If your gross trading income is £1,000 or less, you do not need to tell HMRC, unless you have to register for another reason such as a different source of income (GOV.UK, checked 2 October 2026). That £1,000 is called the trading allowance, and it covers self-employment and casual services such as babysitting or gardening (GOV.UK, checked 2 October 2026).

When is the deadline to register as a sole trader?

The deadline is 5 October after the end of the tax year you need to report (GOV.UK, checked 2 October 2026).

So if you started trading in the 2025–26 tax year, which ran from 6 April 2025 to 5 April 2026, your registration deadline is 5 October 2026 (GOV.UK, checked 2 October 2026). If you started later than that, the same rule gives you a deadline a year on, and GOV.UK publishes the current date each year, so check it there rather than working it out yourself.

Registering late is a real risk. If you register after 5 October and you have not paid the full bill by 31 January, you may get a failure-to-notify penalty based on the amount you still owe (GOV.UK, checked 2 October 2026).

What do I need before I register?

Not much. You do not need a business plan, a limited company or a VAT number to register as a sole trader. You can start trading straight away and register afterwards, as long as you do it by the deadline (GOV.UK, checked 2 October 2026).

You can trade under your own name or under a business name, and there is nothing extra to file for either (GOV.UK, checked 2 October 2026). What you do need is your start date and a way to keep records, because you must keep records from when you start trading (GOV.UK, checked 2 October 2026).

One thing to understand early: a business name does not protect your personal money. As a sole trader your liability is unlimited, which means you are personally responsible for all business debts (GOV.UK, checked 2 October 2026).

What happens after I register?

You get a Unique Taxpayer Reference (UTR) — the reference number HMRC uses to identify you for tax. It usually arrives by post around 15 days after you register, and longer if you live overseas (GOV.UK, checked 2 October 2026).

Keep it somewhere safe. You use your UTR to file your Self Assessment tax return, which you do each year while you are self-employed. From then on, your year looks like this: keep records as you go, add up your income and expenses after 5 April, submit the return, and pay what you owe.

How much National Insurance and Income Tax will I pay?

For 2026–27, Class 4 National Insurance is 6% on profits between £12,570 and £50,270, and 2% on profits above £50,270 (GOV.UK, checked 2 October 2026).

Class 2 National Insurance is treated as paid if your profits are above £7,105. Below that you can pay it voluntarily at £3.65 a week (GOV.UK, checked 2 October 2026).

Income Tax in England for 2026–27 runs like this: the Personal Allowance covers up to £12,570 at 0%, the basic rate is 20% from £12,571 to £50,270, the higher rate is 40% from £50,271 to £125,140, and the additional rate is 45% over £125,140 (GOV.UK, checked 2 October 2026). Bands differ in Scotland. As a sole trader you keep all your profits after tax (GOV.UK, checked 2 October 2026).

Do I need to register for VAT as a sole trader?

Only once your taxable turnover goes over £90,000. If it goes over £90,000 in any 12 months, you must register within 30 days of the end of the month it went over. If you expect it to go over £90,000 in the next 30 days alone, you must register too (GOV.UK, checked 2 October 2026).

You can register voluntarily below £90,000 if you want to (GOV.UK, checked 2 October 2026). Most one-person service businesses stay under the threshold for a while, but it is worth checking your running 12-month total a few times a year rather than being surprised by it.

What records do I have to keep?

You must keep records of your income and expenses from the day you start trading (GOV.UK, checked 2 October 2026). These are what you build your tax return from, so the earlier you start, the less painful the January filing is.

If your gross income goes over £1,000, you must tell HMRC. At that point you have a choice: you can deduct the £1,000 trading allowance instead of your expenses, but not as well as them (GOV.UK, checked 2 October 2026). For most people with real costs — stock, tools, mileage — adding up actual expenses works out better, but the option is there.

Step by step

Check whether you need to register. If you expect to earn more than £1,000 from self-employment in a tax year, you do (GOV.UK, checked 2 October 2026). Read the rules at gov.uk/set-up-sole-trader. Cost: nothing.
Decide what you trade as. Your own name or a business name, it makes no difference to HMRC (GOV.UK, checked 2 October 2026). Cost: nothing.
Register for Self Assessment on GOV.UK. Go to gov.uk/register-for-self-assessment and do it before 5 October after the tax year you need to report. No fee is stated on GOV.UK's sole trader or Self Assessment registration pages (checked 2 October 2026).
Watch the post for your UTR. It usually arrives around 15 days after you register, longer if you live overseas (GOV.UK, checked 2 October 2026). Cost: nothing. Keep the letter.
Start keeping records now. Income, expenses, dates. Use a spreadsheet or a book — it does not matter which, only that it is complete from the day you start trading (GOV.UK, checked 2 October 2026).
Watch your turnover for VAT. Add up your last 12 months of sales regularly. Over £90,000 and you must register within 30 days of the end of that month (GOV.UK, checked 2 October 2026).
Diary the dates. Pay your bill by 31 January. If you miss the tax return deadline, the initial penalty is £100, then £10 a day after three months up to £900, with further charges at 6 and 12 months of 5% of the tax due or £300, whichever is greater (GOV.UK, checked 2 October 2026).

AI shortcut: Once your UTR is on its way, use AI to build your record-keeping habit and shortlist a trading name — both are drafting jobs, not tax questions.

You are helping me get organised to trade as a sole trader in the UK.

My details:
- Trade or service: [e.g. mobile dog grooming]
- Town: [e.g. Leeds]
- Date I started or will start trading: [DD Month YYYY]
- Roughly what I expect to earn in my first year: £[amount]
- Main costs I will have: [e.g. van fuel, shampoo, insurance]

Please:
1. Write a plain-English checklist of the things I should get organised in my first month of trading, in order.
2. Build me a simple records template (column headings only) for income, expenses and mileage that I can paste into a spreadsheet.
3. Suggest 10 possible business names and flag any that are hard to spell or say out loud.
Do not give me tax or legal advice. I will check rules and deadlines on GOV.UK myself.

Common mistakes

Waiting until you have earned well over £1,000 before doing anything. The deadline is fixed at 5 October after the tax year ends (GOV.UK, checked 2 October 2026).
Confusing registering with filing. Registering gets you a UTR; the tax return is a separate job you do every year after that.
Not keeping records from day one. You are expected to keep them from when you start trading (GOV.UK, checked 2 October 2026), and rebuilding a year from bank statements is miserable.
Taking the £1,000 trading allowance and your expenses. You can use the allowance instead of expenses, not as well (GOV.UK, checked 2 October 2026).
Assuming a business name protects you. As a sole trader your liability is unlimited — you are personally responsible for all business debts (GOV.UK, checked 2 October 2026).
Ignoring the VAT threshold. Going over £90,000 in any 12 months means you must register within 30 days of the end of that month (GOV.UK, checked 2 October 2026).

FAQs

Do I need to register if I earn under £1,000?

No. If your gross trading income is £1,000 or less in a tax year, you do not need to tell HMRC, unless you must register for another reason (GOV.UK, checked 2 October 2026). Go over that and you must tell HMRC.

How long does a UTR take to arrive?

Usually around 15 days after you register, by post, and longer if you live overseas (GOV.UK, checked 2 October 2026). If it has not turned up, you can check your UTR online rather than registering again.

Is there a fee to register as a sole trader?

No fee is stated on GOV.UK's sole trader or Self Assessment registration pages (checked 2 October 2026). That is different from a limited company, which costs £100 to register online (GOV.UK, checked 2 October 2026).

Can I be a sole trader and have a full-time job?

Yes. Being employed does not stop you trading on the side. You register once your self-employed income goes over £1,000 in a tax year (GOV.UK, checked 2 October 2026), and your Income Tax is worked out on your income as a whole using the 2026–27 bands (GOV.UK, checked 2 October 2026).

What happens if I register late?

If you register after 5 October and have not paid the full bill by 31 January, you may get a failure-to-notify penalty based on the amount you still owe (GOV.UK, checked 2 October 2026). Late payment also carries 5% of the unpaid tax at 30 days, 6 months and 12 months, plus interest (GOV.UK, checked 2 October 2026).

Do I need to tell HMRC my business name?

No. You can trade under your own name or a business name, and there is nothing to file either way (GOV.UK, checked 2 October 2026). Just remember the name gives you no extra protection — your liability stays unlimited.

What can I claim against my tax?

Either your actual expenses, or the £1,000 trading allowance instead of them — not both (GOV.UK, checked 2 October 2026). Work out which leaves you with less taxable profit before you file.

What to do next

Read Sole trader or limited company: which should I choose? before you register, because the £100 limited company route is worth comparing honestly. Then browse our business ideas to find something worth starting.

Information, not tax, legal or financial advice. Figures checked against GOV.UK on 2 October 2026.

Last updated 2 October 2026

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