Whether you’re starting a consultancy business, launching an online shop, or turning your weekend dog-walking into a proper venture, registering with HMRC is an essential first step.
The good news? Registering as self-employed is a straightforward process, and it can be completed entirely online in a matter of minutes.
The not-so-good news? Miss the deadlines or get the process wrong, and you could face penalties that chew into your hard-earned profits.
Let’s walk through exactly how to register as self-employed, what information you’ll need, and the crucial deadlines you cannot afford to miss.
When Do You Need to Register?
Understanding when you need to register is perhaps the most important part of the entire process. The rules have been subject to recent discussion and upcoming changes, making this area particularly relevant right now.
The Current £1,000 Threshold
Right now, you must register as self-employed if you earn more than £1,000 from self-employment in a tax year.
This £1,000 threshold is your total income before expenses – not your profit. This means if you sell £1,200 worth of items but spend £300 on stock, you still need to register because your total sales exceed £1,000.
This threshold applies to all forms of self-employment combined. If you’re selling products on eBay and also delivering food through Uber Eats, for example, both incomes count towards the same £1,000 limit.
Side Hustles and the Gig Economy
The rise of side hustles has created confusion about registration requirements. Many people assume that because they have a full-time job, their weekend activities don’t count as “real” self-employment. This couldn’t be further from the truth.
Whether you’re employed full-time and earning extra cash on the side, or you’re unemployed and trying multiple income streams, the £1,000 threshold applies equally.
HMRC doesn’t distinguish between “main” employment and side activities when it comes to self-employment registration.
Digital Platform Reporting
Since January 2024, digital platforms such as eBay, Vinted, Airbnb, and Etsy have been required to report seller information directly to HMRC.
If you make more than 30 sales in a year or earn over €2,000 (around £1,700), the platform shares your total income, number of sales, and personal details with HMRC.
This means HMRC now has much better visibility of side hustle income, making proper registration and reporting more important than ever.
Specific Scenarios
Let’s look at some specific situations to clarify when registration is required:
- Casual Selling vs Business Activity: Clearing out your wardrobe on Vinted occasionally isn’t usually considered trading. However, if you’re regularly buying items specifically to resell them at a profit, this becomes business activity subject to the £1,000 threshold.
- Property Income: If you’re renting out your home on Airbnb or letting parking spaces, this counts as property income rather than trading income. The threshold here is also £1,000, but it’s calculated separately from trading income.
- Multiple Small Activities: If you tutor for £600, sell crafts for £300, and do delivery driving for £400, your total self-employment income is £1,300, which exceeds the threshold and requires registration.
- Employment Plus Side Work: Having a full-time job doesn’t exempt you from registration requirements. If your side activities earn over £1,000, you must register regardless of your employment status.
As you can see, self-employment is wide-ranging. HMRC is well aware that many people don’t pay tax on these earnings, which is why they’re ramping up campaigns to prevent that and close the tax gap with employed PAYE taxpayers.
When You Must Register (And Why Timing Matters)
The timing of your registration isn’t flexible – it’s a legal requirement with specific deadlines that can cost you money if missed.
The Golden Rule: You must register by 5 October after the end of the tax year in which you became self-employed. This might sound confusing, but here’s how it works in practice.
If you started your business or self-employment at any point between 6 April 2024 and 5 April 2025 (the 2024/25 tax year), you must register by 5 October 2025. The earlier, the better.
Missing the registration deadline isn’t just inconvenient – it’s expensive. You’ll face automatic penalties that start immediately after the deadline passes.
Understanding Self-Employment vs Employment
Before diving into registration, it’s worth checking whether you actually need to register as self-employed. You’re classed as self-employed if you run and have full responsibility for your own business. This means you typically decide when you work, who you work for, and how you complete your tasks.
The distinction matters because employees have tax deducted automatically through PAYE, while self-employed individuals must handle their own tax affairs through self-assessment.
If you’re unsure about your employment status, HMRC provides an Employment Status tool on their website that can help clarify your position. This is particularly useful for contractors or those in complex working arrangements.
The Step-by-Step Registration Process
The actual registration process involves registering for both self-assessment and Class 2 National Insurance contributions simultaneously. Here’s how to do it.
Step 1: Create Your Government Gateway Account
Visit the HMRC website and look for the “Register for Self Assessment” section. If you don’t already have a Government Gateway account, you’ll need to create one. This gives you access to all HMRC online services.
The system will ask for your email address and will send you a user ID that you’ll use to complete the registration.
Step 2: Complete the Online Registration Form
Once logged in, you’ll complete the self-employment registration form. The system will ask about your employment status (whether you’re employed elsewhere), your business activities and industry, expected earnings and business structure, and whether you need to register for other taxes.
Be as accurate as possible with your business description. HMRC uses this information to understand your activities and may ask follow-up questions if anything seems unclear.
Step 3: Submit Your Registration
After reviewing all your information, submit the form online. Once you’ve done this, you’ll receive a letter with a 10-digit Unique Taxpayer Reference (UTR), which you’ll use for all subsequent tax payments.
This letter typically arrives within 7-10 days, although it may take longer during busy periods. Your UTR is crucial for all future dealings with HMRC, so keep it safe.
What About VAT Registration?
Self-employment registration is separate from VAT registration. You only need to register for VAT if your taxable turnover exceeds £90,000 in any rolling 12-month period, or if you choose to register voluntarily.
VAT registration has its own deadlines and requirements, but many assume it doesn’t apply to sole traders, which is not true.
Ongoing Obligations After Registration
Registration is just the beginning. Once registered, you’ll have ongoing responsibilities that keep you compliant with HMRC requirements.
Your main obligations include:
- Record keeping: Maintain accurate records of all business income and expenses throughout the year
- Annual tax returns: Complete self-assessment tax returns by 31 January following the tax year end
- Tax payments: Pay income tax and National Insurance contributions on your profits when due
- Payments on account: Make advance payments if your tax bill exceeds £1,000
You should also keep HMRC informed about any changes to your circumstances:
- Changes to your business structure or activities
- Hiring staff or taking on a business partner
- Updates to your personal details or contact information
- If you stop being self-employed
Staying on top of these obligations from day one makes managing your self-employment much easier.
Getting Professional Help
While registration is straightforward, managing your ongoing tax affairs as a self-employed person involves more moving parts than many people expect.
Consider getting professional help if you’re unsure about any aspect of the process, have multiple income sources, are considering different business structures, or want to ensure you’re claiming all available tax reliefs and allowances.
Professional accountants can help you set up proper record-keeping systems and tax-efficient structures from day one, potentially saving you both time and money in the long run.
At Double Point, our team of chartered accountants specialises in helping new sole traders and self-employed individuals handle their tax obligations efficiently, leaving you free to focus on growing your business.
Why not book a free consultation with us today to discuss how we can support your self-employment journey?
