Guide to Registering as a Sole Trader
Step-by-Step Guide on How to Register as a Sole Trader in the UK
Registering as a sole trader in the UK is something that a lot of freelancers, tradespeople and small business owners do. It’s relatively easy, requires very little in terms of administration - compared to a limited company, at least - and means that you keep all of your profits after you’ve paid income tax and National Insurance Contributions (NICs). But, do you know how to go about getting everything set up?
At Go Limited, we are here to help you register as a sole trader in the UK. We know all there is to know about becoming a sole trader - including what you need to register, how to register and the process - and following our step-by-step guide will take you from beginning to end, ensuring nothing is missed
What is a Sole Trader?
Before you register as a sole trader, you need to know what a sole trader is and the benefits of becoming one. A sole trader is someone who runs their own business and is personally responsible for its success or failure. A lot of freelancers and self-employed workers are sole traders, and it’s an extremely common business structure in the UK. Being a sole trader gives you complete control over any decision-making and business operations, and everything that happens within the business goes through you.
When you’re a sole trader, there’s no legal separation between your business and yourself as an individual - unlike in a limited company, where you and your business are considered to be separate entities - meaning that you are solely responsible for all debts and obligations. This means that carefully managing your sole trader finances is key.
How to Register as a Sole Trader in the UK
There’s a lot that goes into registering as a sole trader in the UK, but the process is likely to be easier than you think.
Step-by-Step Guide to Set Up as a Sole Trader
Check That You’re Eligible
Before registering as a sole trader, take a moment to confirm that your planned business activities comply with all necessary regulations. Some professions require specific licenses or qualifications, and you won’t be able to register without them. Make sure that you meet these requirements before proceeding.
Choose a Business Name
You can trade under your own name or create a unique business name. If you decide to trade under a business name, make sure it’s unique and doesn’t include offensive words. You’ll also need to make sure that your name doesn’t imply you’re a limited company.
Register with HMRC - To operate as a sole trader, you must inform HMRC that you’re self-employed. This includes going on the HMRC website and creating a Government Gateway account, filling in the registration form and waiting for your Unique Taxpayer Reference (UTR) to arrive.
Set Up a Business Bank Account
There’s a legal requirement to set up a business bank account when you’re registering as a sole trader, but having a separate bank account for your business can make managing your finances easier. Plus, it helps to keep your records organised.
Understand Your Tax Obligations - As a sole trader, you’ll need to submit a self-assessment tax return every year by January 31st. You’ll need to provide details of your income and expenses, and HMRC will calculate your tax liability based on how much you've earned. You’ll also pay NICs at the same time.
Keep Accurate Records
You’re legally required to keep detailed records of your income, expenses and invoices for at least five years. If HMRC wants to look into your business or conduct an investigation into your earnings, you'll need accurate records to back up the information you’ve given in your self-assessment tax returns.
How Long Does Registering as a Sole Trader Take?
Registering as a sole trader is a quick process, and everything can be completed online within a matter of minutes. It’s important to remember that receiving your Unique Taxpayer Reference (UTR) from HMRC can take up to 15 working days, so starting the process early is key if you want to avoid delays.
What Do You Need to Register as a Sole Trader in the UK?
Business Name
When you register as a sole trader in the UK, you have the option to trade under your own name, which many sole traders choose to do, or you can trade under a business name. If you choose to trade under a business name, you need to make sure that the name isn’t already being used by another business. If it is, you could run into future problems, and changing your branding once everything’s up and running can be costly.
National Insurance Number (NI)
You can’t register as a sole trader without a National Insurance number, as this is what links you to the tax and National Insurance systems. If you’ve grown up in the UK, you will have probably been given a NI number shortly before your 16th birthday. If not, you might have to apply for one. You can apply for a NI number if you live in the UK, have the right to work in the UK, are working or you’re looking for work.
Contact Details and Business Address
You’ll need to give HMRC your contact information when you’re setting up as a sole trader in the UK. This includes a physical address where your business operates or is registered.
Business Type
HMRC will want to know the nature of your business before they finalise your registration, so you’ll need to provide details on the products or services that you’ll be providing.
Unique Taxpayer Reference (UTR) Number
Registering as a sole trader requires you to have a UTR. If you’ve previously registered for self-assessment, you’ll already have a UTR but if not, HMRC will give one to you once you register.
Online Self-Assessment Account
Sole traders are required to file tax returns through the self-assessment system, and this is done via the HMRC website and your self-assessment account. Setting up an account is key if you want to manage your sole trader taxes online.
Who Can Set Up as a Sole Trader in the UK?
There are very few limitations on who can set up as a sole trader in the UK, meaning it’s a professional avenue that’s open to the majority of people. Whether you’re starting a freelance career, running a side hustle or throwing yourself in at the deep end and launching a brand new business, setting up as a sole trader is an option worth considering. To register as a sole trader, you need to live in the UK, provide goods or services for profit, and comply with legal requirements for your profession. This includes all licenses, certifications and qualifications that are required to perform the service or provide the products you intend to. As registering as a sole trader is quick and relatively simple, it’s something that’s hugely accessible.
Top Tips for Setting Up as a Sole Trader
As you can see, setting up as a sole trader in the UK is simple and straightforward, but it’s always helpful to have some top tips to follow.
Understand Your Industry’s Regulations - Some industries require additional licenses or permits for those wanting to trade as a sole trader. For example, food services or childcare. If you are planning to work in any industry that does require additional certifications, you’ll need to organise these before registering with HMRC. Failing to do so could land you in hot water going forward.
Plan for Taxes
As a sole trader, you’ll need to pay tax on your earnings. Instead of paying monthly through PAYE, you’ll need to pay everything as one lump sum - or in two lump sums if you’re making Payments on Account, with one due in July - for the tax year, with everything being due by January 31st. It’s a good idea to set aside a percentage of your income throughout the year to cover your tax bill. This will help you to avoid any costly surprises.
Get Insured
Not every sole trader is legally required to have insurance, but it’s usually a good idea. Consider professional indemnity insurance or public liability insurance, depending on your business activities, to make sure that you’re covered if a legal issue arises.
Get Professional Advice
If you’re unsure about your tax or legal obligations, it’s a good idea to get professional advice. Consulting an accountant or financial advisor will make sure that you’re accurately reporting your income, putting enough money aside for tax and making use of any tax deductible expenses you may have.
FAQ
1. What exactly is a sole trader?
A sole trader is someone who runs their business as an individual. You are fully self-employed and personally responsible for any profits, losses, and taxes. It’s the simplest way to start a business in the UK – ideal for freelancers, contractors, creatives, and tradespeople.
Go Limited helps thousands of sole traders get started right – from registration to tax readiness.
2. How do I register as a sole trader?
Registration is free and fast. Just sign up with HMRC for Self Assessment, letting them know you’ll handle your own taxes.
You’ll need to provide:
- Your full name and address
- A business name (if using one)
- Your job type or sector
- Your National Insurance number
You can register online via GOV.UK in just a few minutes. Prefer hands-on support? Go Limited can handle your sole trader registration for you – quickly and accurately.
3. When should I register?
You must register by 5 October in your second tax year.
Example:
If you began working for yourself in May 2025, register by 5 October 2026. But registering early is smarter – you’ll avoid penalties and have more time to prepare for tax responsibilities.
Go Limited offers proactive reminders and filing support so you never miss a deadline.
4. Do I need a business name?
No, you can trade under your own name.
But you can use a business name – just make sure it:
- Isn’t offensive or misleading
- Isn’t already taken or trademarked (check Companies House)
- Appears clearly on invoices and legal documents
Go Limited helps check name availability and guides you on brand-friendly naming that complies with HMRC.
5. What taxes do I pay as a sole trader?
You’re responsible for:
- Income Tax (after the £12,570 personal allowance for 2025/26)
- Class 2 National Insurance (flat rate if profits exceed £6,725)
- Class 4 National Insurance (9% on profits between £12,570–£50,270, 2% above that)
- All income and taxes are reported via your annual Self Assessment, due by 31 January each year.
Go Limited offers access to trusted accountants and tax software to streamline your returns.
6. Do I need a business bank account?
Not required legally – but highly recommended.
Why?
- Keeps your personal and business finances separate
- Simplifies accounting and tax filing
- Enhances credibility with clients and suppliers
Ask Go Limited about easy business account setup with trusted UK providers.
7. What records do I need to keep?
You’ll need to maintain:
- Records of all income, invoices, and sales
- Expense receipts and allowable costs
- Bank statements and business-related purchases
- Keep these for at least 5 years after the tax year deadline.
8. Do I need to register for VAT?
- Compulsory if turnover exceeds £90,000 in any 12-month period (2025 threshold)
- Voluntary registration may help you reclaim VAT or appear more established
- Go Limited can advise whether VAT is right for your business and handle the registration if needed.
9. Can I work for an employer and be a sole trader?
Yes – many people do both.
You’ll need to register as a sole trader and file a Self Assessment for self-employed income, but your employer will continue to handle PAYE for your job.
10. What if I earn under £1,000 – do I still need to register?
If you earn under £1,000 from self-employment in a tax year, you may qualify for the trading allowance and not need to register.
However, registration is worthwhile, if you:
- Expect to grow
- Want to claim expenses
- Need to prove business income
Go Limited helps you register only when it benefits you financially and legally.
11. Do I need insurance as a sole trader?
It depends on your work. You might need:
- Public Liability Insurance (for customer interaction)
- Professional Indemnity (for advice-based services)
- Tools & Equipment Cover
- Income Protection
Insurance isn’t mandatory for all, but it’s strongly advised. Go Limited can help to connect you with competitive sole trader insurance options tailored to your industry.
12. Can I switch to a limited company later?
Absolutely. Many start out as sole traders and go limited once income increases, liability grows, or new tax advantages become appealing.
You’ll need to:
- Register a company with Companies House
- Inform HMRC
- Update banking, contracts, and tax details
Please note: Any rates and thresholds mentioned in this article are correct at the time of publishing and may be subject to change.
This article is a practical, step-by-step guide for anyone looking to register as a sole trader in the UK. It explains what a sole trader is, outlines the full registration process - including choosing a business name, registering with HMRC, understanding tax obligations, and keeping accurate financial records - and highlights key considerations like industry-specific licenses, insurance, and tax planning. Whether you're freelancing, starting a side hustle, or launching a business, this guide helps ensure you meet all legal requirements and get set up correctly.
Please note: Any rates and thresholds mentioned in this article are correct at the time of publishing and may be subject to change.
