Registering as a Sole Trader in the UK: A Simple Step-by-Step Guide for 2025

“You don’t build a business. You build people. And people build the business.” – Zig Ziglar

I’ll never forget the day my friend Jenny decided to go it alone. She’d been freelancing on the side for a year — copywriting for local firms, handling the odd blog post or product description after work. One morning she rang me and said, “I’ve just told my boss I’m quitting. I want to be my own boss now. I’ve no clue what to do next… do I need to tell the government or something?”

Short answer? Yes.

If you’re thinking about becoming self-employed in the UK, you’ll need to register as a sole trader. It sounds complicated. But honestly, it’s not. And I’ll walk you through it step by step — no jargon, no fluff, just straight-talking advice you can actually use.

What is a Sole Trader Anyway?

Think of it this way: being a sole trader means you are the business. You keep all your profits, but you’re also responsible for any losses or debts.

You don’t need to form a company or deal with Companies House. You just need to tell HMRC that you’re self-employed.

Simple, right? Let’s dive in.

When Should You Register as a Sole Trader?

As soon as you start earning money from self-employment, you need to register. Not necessarily after your first invoice — but definitely before 5 October after the end of the tax year when you started trading.

For example, let’s say you made your first bit of side income in March 2025. You’ll need to register by 5 October 2025.

Here’s what caught me out years ago when I started consulting: I didn’t realise selling even a few bits on eBay could count. If you’re regularly trading, offering services, or running any kind of business — even part-time — you probably need to register.

Can You Register Online?

Yes, and honestly, it’s the easiest way.

Head over to the HMRC website and set up a Government Gateway account. Once you’ve done that, you’ll be guided through registering for Self Assessment.

After that, HMRC will send you a Unique Taxpayer Reference (UTR) by post. Guard it with your life. That number follows you everywhere for tax purposes.

It usually takes 10 days, sometimes a bit longer.

What You’ll Need to Register

Grab a coffee. This won’t take long.

You’ll need:

• Your full name and address

• Your date of birth

• Your National Insurance number

• A business name (optional — can just use your own name)

• The date you started trading

• A brief description of what you do

That’s it. You don’t need a business bank account yet (although we’ll talk about why it helps later).

Do You Need to Register with Companies House?

Nope. Not as a sole trader.

That’s only if you set up a limited company. Sole traders report only to HMRC, which keeps things a bit simpler.

What If You’re Still Employed?

Loads of people are employed and self-employed at the same time. It’s common.

Let’s say you work a 9–5 and drive for Uber on weekends. Or you’re a teacher by day and sell crafts on Etsy at night. That counts. You’ll pay tax through PAYE for your job and submit a Self Assessment for your self-employed income.

Just keep clear records of your side hustle. Seriously. I once scribbled mine on a napkin and regretted it deeply come January.

Self Assessment and Tax Deadlines

Once registered, you’ll need to file a Self Assessment tax return each year.

Key dates:

• 5 October – Register as self-employed

• 31 January – Submit your tax return and pay what you owe

• 31 July – Make a second payment on account (if required)

Late? HMRC will fine you. The penalty starts at £100 and goes up fast. Don’t ignore those brown envelopes!

Do You Need an Accountant?

Honestly? It depends.

If your finances are simple, you might manage fine with bookkeeping software like QuickBooks or FreeAgent. But if your income is growing, or you just want peace of mind, an accountant is worth every penny.

Some people are doing their own return and often forget to claim for some of their expenses, like phone bill and internet use. That mistake cost them hundreds. Not a good lesson to learn.

Can You Reduce Your Tax Bill?

Yes. Legally.

As a sole trader, you can claim for business expenses like:

• Home office costs

• Travel and mileage

• Software subscriptions

• Mobile phone use (if it’s work-related)

• Professional insurance or training

Just keep receipts and stay organised. If you’re using your home or car for work, HMRC has simplified ways to claim, too.

Final Thought: Your Business, Your Rules — But Do It Right

Becoming a sole trader is exciting. Scary, too. But mostly freeing.

It’s the first step toward independence — and it’s more doable than most people think.

Jenny? She registered, built up her own clients, and now runs a thriving content agency. She started on her sofa, with an old laptop and a dream. But she did it. And you can too.

Just take that first step. Register.

Got questions? Confused by HMRC’s forms? Reach out — we’ve been through it, and we’are happy to help.