How to Register As Self-Employed With HMRC
Becoming self-employed is a great way to make money and take control of your destiny. But it’s important to remember that you must register with HMRC as soon as possible to ensure you pay the right amount of tax. If you would like to learn more about payroll service numbers, you can do so here .
Here is How to Register as Self Employed with HMRC
Registering as self-employed with HMRC (His Majesty’s Revenue and Customs) in the United Kingdom is straightforward. If you plan to work for yourself and earn income from self-employment, you need to notify HMRC for tax and National Insurance (NI) purposes. Here’s how to register as self-employed:
Before you begin the registration process, gather the necessary information. You’ll need your:
Full name
National Insurance number
Contact details (address, phone number)
Date of birth
Business name and description (if applicable)
Start date of your self-employment
Unique Taxpayer Reference (UTR) if you have one (optional, but useful if you’ve filed taxes before)
You can register as self-employed with HMRC online by visiting the official HMRC website. Here are the steps:
Go to the HMRC website: www.gov.uk/log-in-file-self-assessment-tax-return
Create a Government Gateway account if you still need to get one. You’ll need this account to access various HMRC services, including self-assessment tax returns.
Log in to your Government Gateway account.
Select the option to register for self-assessment and follow the prompts to complete the registration process.
After completing the online registration, HMRC will send you a letter with your UTR and instructions on how to file your self-assessment tax return.
Once you have your UTR, you can set up a self-assessment online account with HMRC.
You’ll need to complete and submit your self-assessment tax return annually.
Based on your self-assessment tax return, HMRC will calculate the amount of tax you owe.
Self-employed individuals are also responsible for paying Class 2 and Class 4 NICs.
Maintaining accurate financial records, including invoices, receipts, and bank statements, is essential to support your tax return and ensure compliance with tax regulations.
If you need clarification on any aspect of self-employment taxation or have complex financial circumstances, consider seeking advice from an accountant or tax advisor to ensure you meet your tax obligations correctly.
For a shortened version:
Gather Your Information
Register Online
Receive Your Unique Taxpayer Reference (UTR)
Set Up a Self-Assessment Account
Complete Your Self-Assessment Tax Return
Pay Your Taxes
Consider National Insurance Contributions (NICs)
Keep Records
Seek Professional Advice
What is HMRC?
HMRC stands for “His Majesty’s Revenue and Customs.” The government department in the United Kingdom is responsible for collecting taxes, administering various social and economic support programs, and enforcing customs and excise laws. HMRC plays a central role in the financial affairs of the UK government and is tasked with ensuring that individuals and businesses meet their tax obligations.
What Happens if I Don’t Register As Self-Employed With HMRC
In the United Kingdom, if you are earning income through self-employment or running your own business, you are typically required to register as self-employed with HMRC (His Majesty’s Revenue and Customs). Failing to register when you meet the criteria can result in legal and financial consequences.
When You Must Register as Self-Employed:
You must register as self-employed with HMRC if your self-employed income exceeds a certain threshold. As of my last knowledge update in September 2021, this threshold was £1,000 of gross income from self-employment in a tax year.
Even if your income is below the threshold, there are other reasons why you might need to register as self-employed, such as:
You want to claim specific tax allowances or deductions related to self-employment.
You must pay Class 2 National Insurance contributions, which are required for self-employed individuals.
Consequences of Not Registering:
If you meet the criteria for self-employment but fail to register with HMRC, you may face the following consequences:
HMRC may impose penalties for late registration and late filing of self-assessment tax returns. These penalties can increase the longer you delay registration.
Failing to register can result in inaccurate tax assessments. HMRC may estimate your tax liability based on available information, which may not accurately reflect your income and expenses.
You may miss out on certain tax benefits, allowances, and deductions available to self-employed individuals. Registering ensures you receive any tax advantages you are entitled to.
Registering as self-employed is a legal obligation if you meet the criteria. Failing to comply with this obligation can lead to legal repercussions.
Self-Employed With HMRC: Fill in the Online Form
If you’re starting a business or already working for yourself, you can register as self-employed in just five steps. You must create a Government Gateway account and fill in the online form SA100 or the self-employed supplement form SA103. The process can take up to 10 days, so leave enough time before submitting your tax return.
Before you start filling in the online forms, gather together all your records of sales and income, bank statements, expense receipts and other financial documents. You will also need details of any interest on savings accounts and the dividends you’ve received from investments.
You will have to decide what business model you will operate under, whether it’s as a sole trader or a partnership. You must register the business at Companies House to operate as a limited company.
You can choose to operate under any name you like, but if you choose a specific trading name, check that there are no existing businesses using that name. This will help avoid any potential problems in the future. Once registered, you must file a tax return each year and pay taxes as appropriate. The most important thing is to keep accurate records so that you can accurately calculate your tax and national insurance contributions.
Self-Employed With HMRC: Submit the Form
When you become self-employed, you must tell HMRC so they can process your income tax return. This is a legal requirement; you will be fined £100 if you fail. Registering as self-employed is quick and easy and costs nothing, so do it as soon as you start trading.
Once you’ve submitted the online CWF1 form, you’ll receive your Unique Taxpayer Reference (UTR). This number is used to identify you as a taxpayer, and it will be shown on all your Self Assessment paperwork. You’ll also need it if you file your taxes online or contact HMRC to request a tax refund.
You can also download the CWF1 form from the HMRC website and fill it out by hand or send it by post. However, submitting the paper form can take longer as the local office must process it.
If you have questions regarding the CWF1 form, please get in touch with the HMRC website and contact their customer service team. They will be happy to help you. They’ll also be able to tell you how long it will take for you to receive your UTR once you submit the online form.
Alternatively, you can call HMRC’s phone number and speak to an advisor. Their lines are open from 8 am to 7 pm, Monday to Friday.
Self-Employed With HMRC: Receive your Unique Taxpayer Reference (UTR)
Your UTR is a unique code identifying you as self-employed for tax purposes. It is a 10-digit number found on essential documents from HMRC, like a CT603 form (notice to complete your company tax return). Your UTR stays the same even if you change jobs or become employed again. It’s worth keeping a record of it in case you need to provide it to someone else, such as your accountant or financial advisor.
Registering as self-employed is essential, as it helps the government keep track of what you earn and pay. It can also help you avoid paying over the odds, as it ensures that your taxes are correctly calculated. You can check whether you need to register by answering a few questions on the government website.
Once you’ve set up your Government Gateway account, the next step is to fill in the online CWF1 form. This will ask you for personal information, details about your business, and a declaration that everything is accurate. Once you’ve submitted the form, you should receive your UTR in the post within ten days. Alternatively, you can find it sooner in your online tax account or the HMRC app. Keep it safe – you must reference it when you submit a self-assessment tax return.
Self-Employed With HMRC: Manage your Tax Online
Whether you have just started your own business or are earning extra income from part-time work, it’s essential to register as self-employed with HMRC. This ensures that you pay the correct income tax and National Insurance. It also helps you manage your finances to keep track of your income and expenses.
You can register as self-employed online by completing the CWF1 form on the HM Revenue and Customs website. Once you’ve submitted the form, you’ll receive a Unique Taxpayer Reference (UTR) within ten days. You can then use this to manage your tax affairs and file a tax return.
Once registered as self-employed, you must file a tax return every year by 31 January. You should also make two payments on account each year by 31 January and 31 July. These payments pay your income tax and Class 2 National Insurance contributions. You can stagger these payments if you wish.
When you’re no longer self-employ ed, you must tell HMRC by submitting a CWF2 form on the HM Revenue and Customs site. This will allow you to claim any tax rebates or allowances you may be entitled to. It’s also a good idea to keep records of your earnings, as this will help you file your tax returns correctly.
Hi, I’m Ally Cox, one of the leading Copywriter/Bloggers at CompareYourBusinessCosts.co.uk, a platform renowned for its in-depth analysis and comprehensive comparisons of business services. With over a decade of experience in the industry, I bring a wealth of expertise in areas such as leased lines, VoIP, business energy and office solutions, HR solutions, accounting, and payroll services, among others.
My journey in the industry began over 10 years ago, and my extensive knowledge enables me to provide invaluable insights to our users and customers. Prior to joining CompareYourBusinessCosts, I’ve been involved in various business ventures, gaining hands-on experience in HR and copywriting across a multitude of different sectors, gaining valuable knowledge about everything from clocking in systems to card machines, EPOS systems, payroll services, and so much more.
My mission is to simplify the often-complex buying process for businesses, helping them streamline their product and service comparisons effectively. By leveraging the expertise I’ve acquired over the years, I aim to assist businesses in making informed decisions that enhance their efficiency and bottom line.