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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.
Sole traders must register with HM Revenue and Customs. There are three ways you can do this:
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 2023 to April 2024, you should register before 5 October 2024. 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.
If you’re a sole trader you’ll need to register for Self Assessment. Ensure you register by 5 October in your second tax year. How you register depends on your circumstances:
Let HMRC know you want to be a sole trader by registering as a new business. You’ll register your business and also register for Self Assessment tax returns and Class 2 National Insurance at the same time.
You may have previously sent Self Assessment tax returns as an individual, e.g. for income from rental property or investments. You now need to register as self-employed and for Class 2 National Insurance using form CWF1. You can keep your existing Self Assessment account but you’ll need your existing Unique Taxpayer Reference (UTR) that will be on your previous tax returns and your online account or other documents. If you can’t find it, call the Self Assessment helpline on 0300 200 3310 (textphone 0300 200 3319).
You need to re-register using form CWF1. As you’ll have registered when you were previously a sole trader, you can keep your existing Self Assessment account but you’ll need your existing Unique Taxpayer Reference (UTR). This will be on your previous tax returns and your online account or other documents. If you can’t find it, call the Self Assessment helpline on 0300 200 3310 (textphone 0300 200 3319).
Let HMRC know you want to be a sole trader by registering as a new business. You’ll register your business and also register for Self Assessment tax returns and Class 2 National Insurance at the same time.
You may have previously sent Self Assessment tax returns as an individual, e.g. for income from rental property or investments. You now need to register as self-employed and for Class 2 National Insurance using form CWF1. You can keep your existing Self Assessment account but you’ll need your existing Unique Taxpayer Reference (UTR) that will be on your previous tax returns and your online account or other documents. If you can’t find it, call the Self Assessment helpline on 0300 200 3310 (textphone 0300 200 3319).
You need to re-register using form CWF1. As you’ll have registered when you were previously a sole trader, you can keep your existing Self Assessment account but you’ll need your existing Unique Taxpayer Reference (UTR). This will be on your previous tax returns and your online account or other documents. If you can’t find it, call the Self Assessment helpline on 0300 200 3310 (textphone 0300 200 3319).
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:
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