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 and examination markers who usually have tax deduced at the basic rate but not NIC. 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. However, if you have only a small amount of self-employment income and can use the trading allowance then you may not need to register with HMRC.
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 GOV.UK
- by completing an online form CWF1
- phoning the HMRC helpline for the newly self-employed
- by completing the on screen form and printing it off and posting it 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.
When completing online forms on GOV.UK, such as form CWF1, there is often no facility to save the form when you have only partially completed it. This means that you need to make sure you have all the information you require available when you start completing the form. We would also recommend that you print a copy of the form.
Novak started trading on 1 January 2018. The latest date that he should notify HMRC that he has started trading is 5 October 2018.
What happens if I do not register or register late?
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 have to pay interest on any late paid tax.
However if you miss the October deadline but still manage to register as self-employed, file a tax return by the following 31 January and pay any tax owed by the same date, you should not run the risk of being charged any penalties. So, in the example above, if Novak did not notify HMRC about his new self-employment until November 2018, as long as he completed and submitted a 2017/18 tax return AND paid the tax due by 31 January 2019 he should not be charged any penalties for the late notification of his self-employment.
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 see our page 'What to do if I lose or forget my National Insurance number'.
If you have not completed a self assessment tax return before then after you have registered with HMRC you will receive your Unique Tax Reference (UTR) number. The UTR is a ten digit number which you will need when completing your tax return and whenever you contact HMRC.
Each year, shortly after 5 April, you will be notified by HMRC that you need to complete a tax return.
Megan started her new business in July 2018 (this is in the 2018/19 tax year which runs from 6 April 2018 to the 5 April 2019). She notified HMRC that she was newly self-employed in August 2018. At the end of the 2018/19 tax year, (so after 5 April 2019) Megan will receive a notice to file a self assessment tax return for the 2018/19 tax year from HMRC.
You will either be sent a notice to complete a tax return in the post or, if you have signed up for electronic communications via your personal tax account, you will receive a message in this account. If you are registered for HMRC’s online services (for example if you registered online), you may find that the self assessment link will redirect you to your personal tax account which will have been automatically created for you, as the personal tax account is HMRC’s preferred method for submitting online tax returns.
You can obtain details in the section 'What National Insurance 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.