How To Register As Self Employed In The UK

If you’ve decided to take the leap and set yourself up as self-employed, you have an exciting journey ahead! However, before you get started, you will need to register as self-employed. According to HM Revenue and Customs (HMRC), if you start working for yourself, you’re considered a “sole trader” and have full responsibility for your business.

As a self-employed worker, you won’t be paid through PAYE. Instead, you must pay your income tax and National Insurance contributions (NI) via self-assessment each year, which means you need to be officially registered with HMRC. You can keep all your business’s profits after you’ve paid tax on them, but you’re personally responsible for any losses your business makes.

How do I register as self-employed with HMRC?
Registering as self-employed is very straightforward and can be done easily through the HMRC website. Firstly, you will need to visit the HMRC website and create a Government Gateway account, which will be the account you’ll use to manage your taxes online. You’ll receive a unique 12-digit user ID and be asked to create a password.

Once you have followed the next couple of steps, HMRC will need some key information from you, including:
• The date you first started trading
• The type of tax you want to add (self-assessment)
• National Insurance number
• Home address and contact details
• The type of self-employed work you do

HMRC will then review your application. All being well, you’ll receive your Unique Tax Reference (UTR) number in the post within ten working days. This is a 10-digit number that proves you’re registered as self-employed. You’ll need it whenever you speak to HMRC, manage your account online, and submit your tax returns.

Finally, you will need to enter your Government Gateway activation code. This is part of the verification process for your HMRC online account. It can take up to 28 days to arrive, and it will expire, so enter it as soon as you receive it.

Your responsibilities:
• You must track your income and expenses and file any correspondence you have with HMRC.
• Send a Self-Assessment tax return every year
• Pay Income Tax on your profits and Class 2 and Class 4 National Insurance – you can use HMRC’s calculator to help you budget for this.
• You must register for VAT if your turnover is over £85,000. You can register voluntarily if it suits your business, for example if you sell to other VAT-registered businesses and want to reclaim the VAT.

What insurance do I need when I’m self-employed?
The type of insurance you’ll require can vary depending on the kind of work you do and whether you have employees. Two common types of insurance policies taken out by self-employed workers are:
Professional indemnity insurance to guard against potentially costly mistakes
Public liability insurance to protect against workplace/on-site accidents

There are also more specific insurance policies tailored to the type of work your business does. Here at 1st Choice Insurance, we work with over 100 insurance companies in the UK, meaning no matter your business, size or location, we can find a suitable policy for you.

Contact our skilled team on 01743 770500 or you can fill out our get a quote form here.