How do I register for tax and National Insurance?
This page is all about how you register as self-employed for income tax and National Insurance contributions (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 (also known as your trading income) so you are responsible for making the necessary payments to HMRC. The exceptions are subcontractors in the construction industry who often have tax deducted from payments made to them and examination markers who usually have tax deducted at the basic rate but not NIC. We cover these exceptions in our self-employment tax guide and we also cover the CIS including how to register for CIS on our page, How do I pay tax under the Construction Industry Scheme (CIS)? If CIS applies to you, then you must still register as self-employed and then also register as a subcontractor for CIS – they are two separate registrations.
By law you are required to register with HMRC so they know they have to issue you with a notice to complete a Self Assessment tax return and send you tax statements when required. The one exception to this is iIf 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 2019. He expects to have income of £12,000 in the period to 5 April 2019 and so will not be entitled to full relief using the trading allowance. The latest date that he should notify HMRC that he has started trading is 5 October 2019.
It may be the case that you are starting self-employment in two unconnected trades (sometimes called multiple trades),for example, you decide to start your own business as a hairdresser but you also begin to make and sell greeting cards. In these circumstances, you only need to register your self-employment once with HMRC and on your Self Assessment tax return you provide details of your two separate businesses (hairdressing and selling greeting cards). We cover multiple trades on our page, How do I work out my taxable profits?.[CT1]
I am already registered for Self Assessment and I am now starting self-employment. What do I do?
It may be the case that you are already registered for Self Assessment and are completing tax returns but not because you are self-employed (for example, you may receive rental property income).
When you become self-employed you still need to let HMRC know this by the 5 October deadline (see the section above) but as you will be in the Self Assessment system and have a Unique Taxpayer Reference (UTR) already, you need to enter these details in the section of the form CWF1 which asks:
Have you previously registered for Self Assessment? Tick ‘Yes’ and then you will need to enter your UTR (the 10-digit number HMRC use on your Self Assessment tax return and correspondence). Complete the rest of the form with details about your business such as type of work and when you started trading.
You can also complete this version of form CWF1 and print it off and send it to HMRC.
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 tax paid late.
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 2019, as long as he completed and submitted a 2018/19 tax return AND paid the tax due by 31 January 2020 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 section What do I 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 Taxpayer 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 2019 (this is in the 2019/20 tax year which runs from 6 April 2019 to the 5 April 2020). She notified HMRC that she was newly self-employed in August 2019. At the end of the 2019/20 tax year, (so after 5 April 2020) Megan will receive a notice to file a Self Assessment tax return for the 2019/20 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 page What National Insurance do I pay if I am self-employed?.
What happens if I stop trading?
You must inform HMRC that you have stopped trading as soon as possible, you can do this through GOV.UK.
We cover what to do when your business ceases to trade in our section ‘Stopping your business’ on our guide to self-employment. The section covers notifying HMRC and completing, possibly, your last Self Assessment tax return as well as what to do if you are registered for PAYE (Pay As You Earn) and/or VAT.
What should I do if I registered as self-employed but did not actually start my business?
It is possible to have registered for self-employment with HMRC but then due to a change of circumstances (perhaps an offer of employment), you decide not to work for yourself and never actually start trading. If this happens then you must contact HMRC as soon as possible and let them know you have never traded (so de-register your self-employment). You should ask for written confirmation from HMRC that you are no longer required to complete and file a Self Assessment tax return (unless you need to do so for another reason unconnected with being self-employed).
If you do not do this then HMRC will expect you to file a Self Assessment tax return and if this is not done HMRC will issue late filing penalties even if there is no additional tax to pay.
Our guide to self-employment is intended to supplement the material in this section. It explains the less common tax rules and contains more detailed information including a case study showing how to prepare accounts and what to include on your tax return. We wrote this guide to help advisers (non-tax) who advise low-income self-employed individuals and also for self-employed people who want more detailed information in one accessible place. The guide also covers NIC and special circumstances that may apply when calculating National Insurance contributions.
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 GOV.UK.
If you need further help from HMRC on registering for tax or NIC you can contact the new self-employed helpline.