How long does it take to register as a sole trader?

Registration with HMRC is immediate when done online, but you'll receive your UTR number by post within 10 working days. You must register within 3 months of starting self-employment to avoid penalties.

Does registering as a sole trader cost anything?

No, registering as a sole trader with HMRC is completely free. There are no registration fees or ongoing costs to maintain your sole trader status.

What's the difference between a sole trader and a limited company?

A sole trader is self-employed and personally liable for business debts, whilst a limited company is a separate legal entity that provides personal liability protection but requires more administrative responsibilities.

Can I register as a sole trader if I already have a job?

Yes, you can be employed and self-employed at the same time. You'll need to register for self-employment for your side business and pay tax on both sources of income.

What records do I need to keep as a sole trader?

You must keep records of all business income and expenses, bank statements, receipts, and invoices for at least 5 years after the 31st January submission deadline for that tax year.

When do I need to register for VAT as a sole trader?

You must register for VAT if your taxable turnover exceeds £90,000 in any 12-month period, though you can voluntarily register below this threshold if beneficial for your business.

How does GoForma help with sole trader registration?

GoForma's Start Sole Trader package includes HMRC registration, dedicated accountant support, FreeAgent software setup, and ongoing self-assessment filing from £39/month with 50% off for the first 3 months.

What happens if I don't register as a sole trader on time?

If you don't register within 3 months of starting self-employment, HMRC may charge a £100 penalty. Additional penalties may apply if you continue to delay registration or filing requirements.

How to Register as a Sole Trader

To register as a sole trader, you must inform HMRC by registering for Self Assessment online or by post, providing your details like NI number, business type, and start date, to receive your Unique Taxpayer Reference (UTR) for annual tax returns. You need to do this within three months of becoming self-employed to avoid penalties, and remember to keep good financial records for your income and expenses.

Last updated Mar 11, 2026

2 min read

Written by Jawad FitchettAAT

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To set up as a sole trader, you need to take the following steps:

Register as self-employed with HMRC online
Choose a business name

After you’ve registered as self-employed, you’ll need to fulfill the following responsibilities as a sole trader:

1. Abide by HMRC's record keeping requirements

You need to keep records of:

Your sales and income
Your business expenses
Your personal income
VAT records, if you've registered for VAT
PAYE records, if you have employees

You need to keep your records for at least five years.

2. Submit a Self Assessment tax return each year

You''ll need to submit a Self Assessment tax return by 31 January each year.

An accountant like GoForma can help you with completing your Self Assessment tax return. You can learn more about the registration process, deadlines, late filing and payment penalties and Making Tax Digital for Income Tax on our Self Assessment guide.

3. Pay income tax and National Insurance Contributions

You'll need to pay income tax, as well as Class 2 and Class 4 National Insurance contributions.

At GoForma, we provide sole trader registration to help you register with HMRC quickly and correctly. If you’re unsure about the process or want to avoid paperwork, our team can handle your registration, help you obtain your UTR number, and make sure your business is properly set up for Self Assessment from the start.

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Sole Trader vs Limited Company - Find Your Best Fit

Calculators Sole Trader vs Limited Company Calculator and Assessment

Our sole trader vs limited company calculator helps you determine the most tax-efficient business structure by comparing your potential take-home income, National Insurance contributions, and Corporation Tax liabilities. Simply input your expected annual profit to receive an instant comparison showing which option could save you money with HMRC.

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How to Register as a Sole Trader

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