A sole trader is a self employed person who owns all of their business. Here’s what you need to know about registering as a sole trader.
If you become a sole trader you must register with HM Revenue and Customs (HMRC). You’ll find out how to do this in the How do I register for Self Assessment? section below, but basically there are three ways:
You’ll need to supply information such as:
If you don’t have an NI number, you can apply for one from Jobcentre Plus on 0845 600 0643, or textphone 0845 600 0643.
If you have an NI Number but you can’t find it, you’ll need to go online and fill in form CA5403. Alternatively, call 0300 200 3502 or textphone 0300 200 3519.
How soon do I need to register?
Register as soon as you can after starting your business. At the latest, you should register by 5 October in your business’s second tax year. For example if you start working as a sole trader between April 2014 to March 2015, you should register before 5 October 2015. If you register later than this, you won’t get a penalty as long as you send your Self Assessment tax return and pay your bill on time.
How much does it cost to register as a sole trader?
It costs nothing to register as a sole trader.
It takes 10 working days (21 days if you’re abroad) to complete the registration process. HMRC will post you an activation code. You’ll be prompted for this when you log in to your online account (known as a ‘Government Gateway account’) for the first time.
If your details change, inform HMRC by:
You need to report your self-employment income by submitting a tax return after the end of each tax year. (The tax year runs from 6 April to 5 April the following year).
The deadlines for submitting your return and paying any money you owe are:
Use form CWF1 to register as a self-employed sole trader.Read more
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