When do I need to register as self-employed?

You need to register as self-employed if your turnover is greater than £1000. This is what you have earned from self-employment before taking off any expenses. If your turnover is less than £1000 from self-employment you do not need to declare this to HMRC.  This is referred to as a  tax free trading allowance.

You need to register and complete a tax return even if you have made a loss. For example if your business had sales figures of £1200 and expenses of £1500 you will have made a loss of £300.  Your turnover is £1200 (over the £1000 trading allowance) so you need to tell HMRC.

The very latest you can register with HMRC is by 5 October after the end of the tax year during which you became self-employed. For example, if you started your business in June 2017, you would need to register with HMRC by 5 October 2018.

If you are starting a business and you want to keep the business finances separate from your personal finances, you may want to think about registering straight away.   Most banks require your UTR number (unique trader reference that HMRC give you when you register) to open a business bank account.

How do I register as self-employed?

You can register online here: https://www.gov.uk/log-in-file-self-assessment-tax-return/register-if-youre-self-employed

You will need to create an online account with HMRC if you haven’t already done so.

Its useful to use an email address that you check regularly as HMRC offer lots of helpful webinars, tips and reminders and they send emails about them. You can find lots of help and support on the HMRC website here: https://www.gov.uk/guidance/help-and-support-if-youre-self-employed

If you are unsure about whether or not you need to file a return or register for self-employment, you know how the saying goes… It’s better to be safe, than to be sorry.