Getting Started: Do you need to register as a sole trader to freelance in the UK?

Getting Started: Do you need to register as a sole trader to freelance in the UK?

When you start freelancing, your focus is on finding clients and earning money. But what about the government? Do you have to tell them that you’re freelancing? You may have heard of something called a ‘sole trader’ – do you need to register the moment you start working with a freelance client?

It’s not always easy to figure out government red tape. If you’re struggling with it, please don’t worry, you are not alone! And by no means let it all stop you from going out there and kicking ass as a freelancer. It won’t take you long to get organised and once you’ve set everything up you can largely forget about it.

NOTE: This post is written for UK freelancers. If you’re in the US, look at Do US freelancers need a business license?? If you’re in another country, please get in touch and I’ll try to help!

What is a sole trader?

When you are a sole trader, you run your own business as yourself, as a person, rather than through a company. Freelancing as a sole trader is the fastest and cheapest way to get started. This is essentially the route that the majority of UK freelancers take when they get started.

Note that it doesn’t matter whether you are in full-time employment, you can still register as a sole trader as well.

When do you need to register as a sole trader?

According to the HMRC:

“Sole traders must register with HM Revenue and Customs (HMRC) and follow certain rules on running and naming their business.”

Now, don’t panic if you’ve already started freelancing! Although you need to register as soon as possible, you officially have until 5 October following the end of the tax year in which you started self-employment at the latest. The UK tax year runs from April 6th to April 5th the next year, so this gives you a fair amount of leeway.

It’s best to register as soon as possible so that you’ve got it out of the way. If you forget, you could end up with all sorts of tax complications.

How can you register as a sole trader?

You can register as a sole trader online, at the HMRC website:

The process is quick and pretty straightforward. There are no fees to pay.

Further information

Once you’re registered as a sole trader, you will need to submit an annual tax return and fulfil a few other obligations, such as keep accurate accounts for your freelancing business. This isn’t complicated but you need to be aware of what the requirements are.

A great place to start is the HMRC’s sole trader page, which has a summary of your obligations and links to other useful resources.

The UK Citizen’s Advice bureau also has a very helpful self-employment checklist.