Home » Business and self-employment » Become a sole trader (self-employed)

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Who handles it

Step by step

1. Choose your business name: your own name or a trading name. It cannot include 'Limited', 'Ltd', 'LLP' or 'plc'.
2. Keep records of your income and expenses from the day you start trading.
3. Register for Self Assessment as a sole trader once your self-employed income in a tax year goes over the limit on GOV.UK (you can register earlier). Tell HMRC by 5 October after that tax year.
4. Check what else applies to you: VAT, licences or permits, insurance and business rates.
5. Send a Self Assessment tax return every year and pay your Income Tax and National Insurance.

What you need

• Your National Insurance number (you need it to register for Self Assessment)
• Records of your sales, income and business expenses
• Your business name and contact details

Common mistakes

• Registering late or not at all: you may get a penalty.
• Assuming an existing Self Assessment registration covers you: you need to register again as a sole trader for Class 2 National Insurance.
• Forgetting that you are personally responsible for all the debts of the business (unlimited liability).

More in Business and self-employment

• Set up a limited company
• Register for VAT
• Register as an employer (PAYE)
• File company accounts and the confirmation statement
• Business rates