How to Register as a Self Employed or Freelancer with HMRC
When do I need to register as self-employed?
Any person or individual who decides to start his own practice or business is referred to as a Sole Trader or Self-employed individual. The first of these is Register as self employed with HMRC and, most likely, Set up as a sole trader or freelancer. The business can enroll with HM Revenue and Customs (HMRC) anytime up to October 5, starting from the business’ second tax year. If the business is already registered, a sole trader can use the online service to:
- fill and send tax returns to HMRC
- review and verify the tax return
Register as Self Employed with HMRC Online
If a self-employed individual is using the online service for the first time, they need to sign-in at the Government Gateway account or can use the GOV.UK verify. It will take approximately ten (10) minutes to sign up for the GOV.UK verify and once this is done, it can be used for other government services. However, this service cannot be used to purchase other software or forms to send self assessment returns for a:
- Trust and estate
- A person living overseas as a non-resident
Various Ways to Setting up as a Sole Trader
- not as a self-employed individual
- as a self-employed person or a sole trader
- register as a partner (s) or partnerships
How to Register as Self Employment in the UK with HMRC
Information required to set up as Self Employed in the UK
Upon registration, a sole trader needs to provide the following information:
- Business name
- Business address
- National Insurance (NI) number
- Contact details including telephone, and email address
- Type of business
- Beginning date of self-employment
- Sole trader’s Unique Tax Reference (UTR)
- Business UTR
- If applicable, details about business partners
Register as Self Employed UTR
A self-employed individual can register for self assessment and Class 2 National Insurance (NI) immediately after opening a business. To register, a sole trader needs a Unique Taxpayer Reference (UTR), a 10-digit number. The UTR can be found on prior tax returns or other HMRC documents, such as notices to file returns or payment reminders. If the UTR is lost, a sole trader will automatically be sent a UTR when he/she register for self assessment or at the time of setting up a limited company. This 10-digit number, at times, can have a letter “K” at the end. It may be called a tax reference. A sole trader can also call the self assessment helpline and ask for the UTR.
Register as Self Employed for National Insurance and Tax
The major advantage of working as a sole trader or a self employed individual is the ease of operating and managing the business. Once an individual starts operating as a sole trader or through a business partnership, he/she becomes accountable for paying the income tax and National Insurance (NI) on their own or through a small business accounting and taxation consultant like DNS Accountants. The business can register with HMRC anytime up to 5 October, from the second tax year of the business. A tax year is from 6 April to 5 April. For example, if an individual starts a new business as a self employed or a sole trader in March 2018, the individual must register until 5 October. However, if the first self employment work is undertaken in May 2018, an individual needs to register as a sole trader with HMRC until 5 October 2019.
Also, once an individual starts operating as a sole trader or self employed, it becomes imperative to complete a self assessment tax return every year and pay the National insurance (NI) contribution. Registering with the HMRC is a fairly simple process and there is very little paperwork involved and a sole trader does not have to pay any company formation cost. However, a sole trader needs to formally register with HMRC, and assume responsibility to pay his/her income tax and National Insurance liabilities.
Also, as a sole trader, the business owner needs to pay Class 2 National Insurance contributions (NIC) on the income. For the tax year 2019-2020, the NIC is £3.00 a week. But, if the business has a profit of less than £6,365 a year for the tax year 2019-2020, the business is not required to make these NI contributions. For the tax year 2019-2020, 9% of the annual profit ranging between £8,632 and £50,000, and 2% of the profit above £50,000 must be paid as Class 4 National Insurance contributions.
HMRC Self Employed Tax Return
|Date of tax return to be filed||Deadline for paper return||Deadline for return when HMRC will calculate tax||Deadline for return online|
|On or before 31 July||31 October||31 October||31 January|
|1 – 31 August||3 months from date of notice||31 October||31 January|
|1 September to 31 October||3 months from date of notice||2 months from date of notice||31 January|
|After 31 October||3 months from date of notice||2 months from date of notice||3 months from date of notice|
Register as Self Employed Form
Self Employment Registration Form can be accessed by clicking here.
HMRC Self Employed Helpline
If an individual decided to work for oneself or if someone is operating as a sole trader, he/she can even speak to the HMRC if they need any guidance for various processes. To get advice, the self employed helpline number is 0844-453-0165. The helpline operates, Monday to Friday, from 8 AM to 8 PM, and on a Saturday from 8 AM to 4 PM. The helpline can provide the following information on self-employment:
- Registering for a new business
- Filing a tax return
- Claiming a NI refund
- Construction Industry Scheme and many more
Need help to Register as a Self Employed in UK – DNS Accountants
DNS Accountants is a skillful team of accounting and taxation professionals that helps clients with services ranging from registering as self employed to business set-up. The firm helps owners managed small businesses and private individuals across the United Kingdom. DNS is an acknowledged firm of ACA’s or Chartered Accountants (CA) and the firm takes pride in saying that we are very helpful to our clients & deliver unparalleled client service and persistently help clients to handle their wealth. The firm’s learned team focuses on helping sole traders with business registration, tax filings, and other services such as self-assessment, payroll management, and bookkeeping. At DNS, we are constantly in touch with our clients and offer
- Fixed price service
- Consistent and transparent service
- Certainty on tax base and taxation advisory
DNS Accountants offers taxation & accounting services to owner-managed-businesses or self employed individuals/freelancers/contractors. For business owners and freelancers/contractors, it is difficult to keep pace with the ever-changing government regulations and rules. Our expert team of chartered accountants and tax professionals help clients in services ranging from bookkeeping to payroll to tax planning, and filing tax returns. DNS Accountants in Harrow help clients focus on maximizing their wealth.