Do I Need to Register as Self-Employed?
Find out if you need to register as self-employed with HMRC. Learn about the £1,000 trading allowance, registration deadlines, and what counts as self-employment.
Key Actions
- Check if your trading income exceeds £1,000 per tax year
- Use HMRC's online tool to confirm if you need to register
- Register by 5 October if you started self-employment in the previous tax year
- Keep records of all income even if below the threshold
If you've started earning money on the side — whether freelancing, selling online, or offering services — you might be wondering whether you need to tell HMRC. The answer depends on how much you earn and how regularly you do it.
The Short Answer
You don't need to register as self-employed if your total trading income is £1,000 or less per tax year. This is called the trading allowance, and it means occasional small earnings are tax-free without any paperwork.
If you earn more than £1,000, you'll need to register for Self Assessment and file a tax return.
What Counts as Self-Employment?
HMRC considers you to be "trading" (and therefore self-employed) if you regularly do any of the following to make a profit:
- Sell goods or services
- Make items to sell
- Sell items online, at car boot sales, or markets
- Earn commission from sales
- Provide services for payment (consulting, tutoring, design work, etc.)
Key indicators of self-employment:
- You're responsible for the success or failure of your work
- You have multiple clients or customers
- You decide when, where, and how you work
- You provide your own equipment
- You fix any unsatisfactory work in your own time
- You charge a fixed price for your work
- You can make a profit or loss
When You Don't Need to Register
You don't need to register for Self Assessment if all of the following apply:
- Your trading income is £1,000 or less in the tax year
- You have no other reason to file a tax return (like rental income or capital gains)
- You're not in a partnership
Examples of income that might fall under the £1,000 allowance:
- Occasional babysitting or pet-sitting
- Selling handmade crafts at a few markets per year
- One-off freelance projects
- Hiring out personal equipment like tools or cameras
Even if you don't need to register, it's a good idea to keep records of your income in case HMRC ever asks.
When You Do Need to Register
You need to register for Self Assessment and tell HMRC you're self-employed if:
- Your trading income is more than £1,000 in the tax year
- You want to claim expenses against your income (even if income is under £1,000)
- You need to pay Class 2 National Insurance to protect your State Pension
- You have other income that requires a tax return
The £1,000 Trading Allowance Explained
The trading allowance gives you two options if your income exceeds £1,000:
Option 1: Use the allowance as a deduction Deduct £1,000 from your trading income instead of your actual expenses. This is simpler if your expenses are low.
Option 2: Claim actual expenses Deduct your real business expenses from your income. This is better if your expenses exceed £1,000.
You cannot use both — it's one or the other for each tax year.
Important: The trading allowance doesn't apply if your income comes from:
- A company you control (or someone connected to you controls)
- A partnership you're involved in
- Your employer or your spouse's employer
Registration Deadlines
If you need to register, you should do so by 5 October following the end of the tax year in which you became self-employed.
| When you started | Registration deadline |
|---|---|
| Between 6 April 2024 and 5 April 2025 | 5 October 2025 |
| Between 6 April 2025 and 5 April 2026 | 5 October 2026 |
If you register late, HMRC may charge a penalty — even if you don't owe any tax.
What Happens If You Don't Register?
If you should have registered but didn't, HMRC can:
- Charge late registration penalties
- Charge interest on any unpaid tax
- Open an investigation into your tax affairs
The penalties increase the longer you delay, so it's better to register as soon as you realise you need to.
How to Check If You Need to Register
HMRC provides a free online tool to help you decide:
- Go to Check if you need to send a Self Assessment tax return
- Answer questions about your income and circumstances
- Get a clear answer on whether you need to register
The tool takes about 5 minutes and covers all types of income, not just self-employment.
Self-Employment vs Hobby
HMRC looks at your intention and behaviour to decide if you're running a business or pursuing a hobby:
| Business (taxable) | Hobby (usually not taxable) |
|---|---|
| Regular sales with profit motive | Occasional sales, no profit focus |
| Organised record-keeping | Casual, irregular activity |
| Marketing and promotion | Sharing with friends/family |
| Reinvesting profits | Personal enjoyment primary goal |
If you're genuinely just doing something for fun without trying to make a profit, it's probably a hobby. But if you're actively trying to earn money and doing it regularly, HMRC will likely consider it a business.
Next Steps
If you've determined you need to register:
- Gather your information — You'll need your National Insurance number and details about your self-employment
- Create a Government Gateway account if you don't have one
- Register online at GOV.UK
- Receive your UTR — Your Unique Taxpayer Reference will arrive by post within 10 working days
This guide is for informational purposes only and does not constitute tax, legal, or financial advice. Tax rules change frequently. Always verify current requirements on GOV.UK or consult a qualified accountant for your specific situation.
Official Sources
- Working for yourself - GOV.UK
- Register for Self Assessment - GOV.UK
- Tax-free allowances on property and trading income - GOV.UK
- Check if you need to send a Self Assessment tax return - GOV.UK