Becoming self-employed is an exciting step toward independence and building your own business. However, it’s important to ensure you meet legal requirements and register correctly with HMRC. In this guide, we’ll walk you through everything you need to know about registering as self-employed, from eligibility to deadlines and beyond.
Who Needs to Register as Self-Employed?
You must register as self-employed if:
- You’ve earned more than £1,000 from self-employment in the last tax year (6 April to 5 April).
- You want to prove your self-employment status (e.g., for tax purposes or to claim benefits).
- You’re making voluntary Class 2 National Insurance contributions to qualify for benefits.
Step 1: Register with HMRC
Registering as self-employed is done through HMRC’s online portal. Here’s how to get started:
- Visit the HMRC Website: Go to the Register as self-employed page on the UK Government website.
- Create a Government Gateway Account: If you don’t already have one, you’ll need to create an account. This will give you a User ID and allow you to set up a password.
- Complete the Registration Form: Provide the following details:
- Your National Insurance number.
- Personal information (name, address, date of birth).
- Business details (start date, nature of your work).
- Submit the Form: Once submitted, HMRC will process your registration.
Step 2: What Happens After Registration?
After registering, you’ll receive a letter from HMRC containing your Unique Taxpayer Reference (UTR) number. This is essential for filing your annual tax return. You’ll also be automatically enrolled in Self Assessment, meaning you’ll need to submit a tax return every year.
Step 3: Keep Accurate Records
As a self-employed individual, you’re legally required to keep detailed records of your income and expenses. This will not only help you complete your tax return but also ensure you pay the correct amount of tax.
Step 4: Key Deadlines to Remember
- Register by 5 October: If you’ve already started trading, you must register by 5 October in your business’s second tax year.
- Tax Return Deadline: The deadline for filing your Self Assessment tax return online is 31 January following the end of the tax year.
Step 5: Paying Taxes as a Self-Employed Individual
Once registered, you’ll need to pay:
- Income Tax on your profits.
- National Insurance Contributions (Class 2 and Class 4).
Payments are typically made in two installments (January and July) if your tax bill exceeds £1,000.
Additional Considerations
- VAT Registration: If your turnover exceeds £90,000 (2023/24 threshold), you must register for VAT.
- Business Insurance: MyDearCarer will pay the insurance for you.
- Pension Contributions: As a self-employed individual, you won’t have access to an employer pension scheme, so consider setting up a private pension.
If you’re unsure about any part of the process, don’t hesitate to consult an accountant or contact HMRC directly for guidance. Good luck on your self-employment journey!