How do I register for tax and national insurance?
This section is all about how you register as self-employed for income tax and National Insurance contribution (NIC) purposes.
If you have decided to work for yourself by becoming self-employed, firstly you need to make sure that you are actually going to be self-employed for tax and National Insurance contributions (NIC) purposes as HM Revenue & Customs (HMRC) will need to be happy this is the case and that you are not in fact an employee instead. Have a look at our ‘employed, self-employed, both or neither’ page to help you work it out. It is possible to have two jobs where you are employed in one and self-employed in another.
No tax or NIC is normally deducted from self-employed income (your ‘trading income’) so you are responsible for making the necessary payments to HMRC. The exception is that subcontractors in the construction industry often have tax deducted made from payments made to them. You can read more about the Construction Industry Scheme ('CIS') on GOV.UK.
By law you are required to register with HMRC so they know they have to issue you with notice to complete a self assessment tax return and send you tax statements when required.
You might also need to consider whether you will need to register for VAT (Value Added Tax). See our VAT page for more information.
You can register in several ways:
- online on HMRC’s website
- by completing form CWF1
- phoning the HMRC helpline for the newly self-employed
- completing a (structured) email to HMRC.
The registration process covers both tax and National Insurance contributions (NIC).
You should register with HMRC as soon as possible after you start trading, and by 5 October following the end of the tax year in which you started self-employment at the latest.
Novak started trading on 1 January 2016. The latest date that he should notify HMRC that he has started trading is 5 October 2016.
If you do not register by the relevant dates you may have to pay a penalty. See our penalties page for more information.
You may also need to register separately for VAT. See our VAT page for more information on whether you need to register and how VAT works for the self-employed.
You need to find out your National Insurance number (NINO) first. You can find your NINO on payslips, benefit letters, or any other correspondence from HMRC. If you still cannot find it then you can phone the National Insurance registrations helpline. Alternatively you can fill in form CA5403.
You can be charged penalties as well as interest if you do not register or do so late. You should make registering a priority when you decide to become self-employed.
The penalties are based on the potential lost tax revenue that arises as a result of the failure to notify on time. The amount of penalty charged depends on the behaviour explaining your failure to notify and this has to fall into one of the following categories – not deliberate, deliberate but not concealed, deliberate and concealed. HMRC may reduce the penalty if you cooperate, by telling them about the failure, by helping them work out the tax due and by giving HMRC access to information and documents they need to check your position.
Each year, shortly after 5 April, you will automatically be sent a notice to complete a tax return or, if you have previously lodged your tax return online, a reminder to lodge your tax return online.
If you registered online, HMRC should automatically set up an online account for you, allowing you to submit your tax return online. You will also be invited to set up your personal tax account which you can use to manage your non-business taxes like your pension, national insurance contributions, benefits or tax credits. You can find out more about HMRC's online services on their website. If you registered on paper, but you now want to submit tax returns online, you can set up an online account with HMRC. You can find out more about your personal tax account in our digital services guide.
You can obtain details in the section 'What NIC do I pay if I am self-employed?'.
HMRC publish a range of useful guides that give further information about starting a business.
You can find more information on starting up a business on the GOV.UK website.
If you need further help from HMRC on registering for tax or NIC you can contact the newly self-employed helpline.