How to Register as Self-Employed: Trade Guide

To go self-employed as a trade, you register with HMRC for Self Assessment and get a Unique Taxpayer Reference — and you must do it by 5 October following the end of the tax year in which you started trading. Miss that window and you risk a penalty, so it is one of the first jobs to sort once the work starts coming in. Here is the whole process, in order, for someone on the tools.

When you actually need to register

You need to register the moment you are working for yourself rather than as an employee — even if it is a side earner alongside a PAYE job. The trigger most trades cross is earning more than the trading allowance in a tax year from self-employment. Below that, HMRC does not need to hear from you. Above it, you do.

The tax year runs 6 April to 5 April. The deadline to register is 5 October after the end of the tax year you started in. So if you took your first job in, say, June, you have until the 5 October of the following year to register. Do not leave it that long — register once the work is real, because you cannot file a return until you are set up and the setup itself takes a few days for the codes to arrive by post.

Sole trader, or something else?

Most trades start as a sole trader. It is the simplest structure: you and the business are the same legal entity, you keep the profits, and you are personally responsible for any debts. Registration is quick and the bookkeeping is light.

The alternative is a limited company, which is a separate legal entity with its own tax rules and more admin. There are good reasons some trades incorporate — liability protection and, at higher profits, tax efficiency — but it is rarely the right first move. Start as a sole trader, get trading, and revisit the question with an accountant once your profits are established. This guide covers the sole trader route.

Step by step: registering with HMRC

1. Set up a Government Gateway account. Go to gov.uk and create a Government Gateway user ID if you do not have one. This is your login for everything HMRC.

2. Register for Self Assessment as self-employed. Through your account, tell HMRC you are now self-employed. You will give your name, National Insurance number, the date you started trading, and a description of your trade (electrician, plumber, builder and so on).

3. Wait for your UTR. HMRC sends your Unique Taxpayer Reference by post — a ten-digit number you will need for every return. Allow a couple of weeks. They also send an activation code for the online service.

4. If you subcontract, register for CIS too. If you work as a subcontractor in construction, register under the Construction Industry Scheme as well. Registered subcontractors have 20% deducted from their labour by contractors; unregistered subcontractors have 30% deducted. That difference is money out of your pocket, so CIS registration is worth doing straight away if construction work is your trade.

National Insurance and the tax you will pay

As a self-employed trade you pay Income Tax on your profits — that is income minus allowable business expenses, not your total turnover. You also pay Class 4 National Insurance on profits above the threshold, collected through the same Self Assessment return. The rules around Class 2 National Insurance changed recently, so if you are near the lower profit thresholds it is worth checking your position on gov.uk or with an accountant, because it affects your entitlement to the State Pension and some benefits.

The key mental shift for a lot of new trades is that tax is not taken off as you earn — it lands as a bill. Put money aside from every job. A rough habit of setting aside a fixed slice of each payment into a separate account keeps you from a nasty January.

Your first Self Assessment

You file one Self Assessment tax return per tax year. The online deadline is 31 January following the end of the tax year, and that is also when the tax is due. So for a tax year ending 5 April, you file and pay by the 31 January that follows.

Keep records from day one: invoices out, receipts for materials, tools, fuel, insurance, phone, protective gear and anything else genuinely used for the business. Good records mean you claim every allowable expense and pay tax only on real profit. Making Tax Digital for Income Tax is also being phased in — it becomes mandatory from 6 April 2026 for qualifying income over £50,000, then over £30,000 from 6 April 2027 — so getting into a tidy digital record-keeping habit now saves a scramble later.

FAQ

How long does it take to register? The online registration is quick, but your UTR and activation code come by post, so allow a couple of weeks before you can file anything.

Do I need to register if it is only a side job? If your self-employed earnings pass the trading allowance in a tax year, yes — even alongside a PAYE job. Below it, you do not.

What is the difference between a UTR and a National Insurance number? Your National Insurance number stays with you for life across all jobs. Your UTR is specific to Self Assessment and identifies you as a taxpayer who files a return.

Do I have to register for CIS? Only if you work in construction as a subcontractor or contractor. It is not mandatory, but registering as a subcontractor drops your deduction rate from 30% to 20%, so it is usually worth it.

When is my first tax bill due? By 31 January after the end of the tax year the return covers. Depending on the size of the bill you may also make payments on account towards the next year.

Spend the time on the tools, not chasing work

Getting registered is the easy admin. Keeping the diary full is the hard part — and that is where Trade Pilot comes in. It is free to join and only charges when a genuine local job lands in your inbox, with each lead capped at three trades so you are quoting against a couple of others, not a crowd. New to self-employment or years in, it is a steady way to keep paid work coming while you build your reputation.

Related reading: how to register for CIS · Making Tax Digital for trades · sole trader vs limited company · VAT threshold for trades