Registering as self-employed only takes a couple of minutes, and it's free, but if you don't do it when you're not meant to, you could be breaking the law and be liable to pay a fine. Unless you're setting up a limited company, you need to register as soon as you are actively seeking work. You need to register even if you already fill out a self-assessment tax return.
You can register by:
If you have an agent who will be completing the form for you, read the information here and make sure they've signed this form. You can register under your own name, or create a business name. Read more about choosing a business name here.
Registering in any of the ways above is quick and straightforward. If you have any problems, call the HMRC newly self-employed helpline on 0845 915 4515.
If you're setting up as self-employed, make sure you:
I'm not sure whether or not the work I'm doing counts as self-employment.
If you receive any payment for work where the person paying you isn't paying you through a PAYE system or they aren't working out your tax and NICs on the payment and paying them on your behalf, that work qualifies as self-employment. Check with whoever's paying you to find out.
I have a job but I'm starting my own business on the side - what's my status?
You still need to register as self-employed as soon as you start actively seeking work for your sideline business.
Should I register as self-employed or set up as a limited company?
To find out more about which type of company set-up will best suit you, read our guides on company formats.
Am I a sole trader if I register as self-employed?
No, not necessarily. You can be in a partnership and be self-employed. If you indicate you're setting up as a partnership when you register you will automatically be registered as a partnership. However, if you are the only person responsible for the business, you are known as a sole trader.
What if I'm going to take on employees and need to set up a PAYE system?
You still need to register as self-employed, unless you're setting up a limited company. You can then set up a PAYE system to pay employees.
What if I'm a freelancer or doing contract work and not sure whether to register?
You need to register as self-employed if the person paying you for work isn't paying tax on your behalf, or deducting it from your pay. Ask the person paying you about this - if they're not, you need to register and sort out your own tax and NICs.
I'm only going to be working for one company/client - am I an employee or self-employed?
If you are going to do all the work for one person or firm, you may actually qualify as an employee rather than needing to register as self-employed. You need to call HMRC's self-assessment helpline to find out your status - call them on 0845 9000 444. Or, visit your nearest HMRC office.
I know I'm not going to turn a profit anytime soon - do I still need to register?
Yes, as soon as you start actively seeking work. You'll still need to fill out a tax return too, even if you're not turning a profit yet.
PAYE: Pay As You Earn (PAYE) is a system employers set up through HMRC to pay employees' tax and NICs automatically.
NIC: National Insurance Contributions (NICs) are regular contributions made to the government to cover the cost of public services such as the NHS, and to contribute to your state pension in the future.
Sole trader: A sole trader is one person who owns the business entirely, and takes personal and individual responsibility for accounts, debts and the running of the business (unlike a partnership, where control and liability for the business are shared). Sole traders can have employees.
As soon as you register, HMRC will send you The Guide, a book designed specifically for the newly self-employed that tackles all the major issues like tax, National Insurance and record keeping
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