A step-by-step guide on registering as self-employed with HMRC
From starting your side business to going freelance full-time, becoming self-employed can feel scary and exciting all at once.
Before you jump right in, you need to ensure that you’re staying on the right side of the law— and this begins with registering as self-employed with HMRC. In doing so, you can be sure that you’re paying the right amount of income tax and National Insurance Contributions, and thereby avoid paying unnecessary financial penalties.
Ready to get started? We’ve got all the information you need below:
While it’s pretty straightforward for most people, there are instances where your employment status isn’t obvious. You’re likely to be self-employed if the following factors apply:
It’s also possible to be employed and self-employed at the same time, such as when you’re doing freelance work on top of your day job.
Tip: If you’re still unsure, check out the HMRC Employment Status Indicator tool. You’ll be asked a series of questions to determine your employment status. You can also call up HMRC to ask about your employment status.
You need to register as soon as you become self-employed. It doesn’t matter if you haven’t yet found work or brought in income, as HMRC considers your business to be in operation the moment you start actively seeking work—such as when you begin your marketing activities.
If you fail to register within three months of starting your business, you’ll be charged a fine of £100. Further delays may result in additional penalties.
You’ll need to register as self-employed if you’re setting up as a sole trader or partnership. You won’t need to register if you’re setting up a limited company, as you’ll be considered as both the owner and an employee of the business. This process is more complicated, and we’ll cover this in a separate article on setting up a limited company.
As a sole trader, you can register:
If you’re setting up a partnership, you can register:
As a self-employed individual, there are several key legal obligations you need to fulfil. These include: