How do I register for HMRC self-assessment?

If you are considering becoming self-employed then there are steps you must take to notify HMRC that you are self-employed and register for self-assessment. This blog gives you all the key facts you need to know about becoming self-employed and registering online with HMRC for self-assessment.

How do I register for self-assessment online?

If you’ve never been self-employed before or you haven’t ever completed a self-assessment tax return, you’ll need to register online with HMRC if you decide to be self-employed. When you register online, you’ll be able to create a Government Gateway user ID, which you’ll need in future for all your dealings with HMRC.

After registration you’ll receive a letter with your Unique Taxpayer Reference (UTR) – keep this safe as you’ll need it, or your accountant will need it to file a tax return.

What if I’ve filed a tax return before, do I need to re-register for self-assessment online?

If you’ve filed a tax return online before, you may need to re-register online if the work you will be doing is different from the work you did previously. You’ll need your Unique Taxpayer Reference (UTR) to do this. If you don’t know your UTR, you can find your UTR online here.

If the work you’re going to be doing is the same as when you previously did a tax return then there is no need to re-register, you can simply sign back into your previous account.

Do I need to register online as soon as I become self-employed?

Its good practice and HMRC encourage people to register as soon as you become self-employed. However, you don’t have to register immediately, as a sole trader you have until the 5th of October in your business’ second tax year to register.

What are the dates of a UK tax year and how does that affect my self-assessment registration?

A tax year runs from 6 April to 5 April the following year.

So, for example, if you started self-employment and working as a sole trader in March 2021, you have until 5 October 2021 to register. But if you don’t start working until July 2021, you have until 5 October 2022 to register with HMRC.

Can I register for self-assessment if I am employed?

The simple answer is yes you can. If you receive additional income that isn’t taxed at source by your employer, then you’ll need to complete a self-assessment. So for example, if you do a part time job where you receive a salary, this is taxed at source. However, if you then do additional work or run a business outside of that employment and receive other income, you will need to register with HMRC for self-assessment and declare your income on your self-assessment tax return.

Do I need to register as self-employed if I only earn a small amount?

If you earn under £1,000 from self-employment within a tax year, you don’t need to register as self-employed or submit a self-assessment tax return. This is because you’ll be covered under something called the trading allowance. For example if you sell some items on E-bay and make some additional income from that, or you earn interest on some shares you own, you won’t need to register if this income is less than £1,000.

However, be aware, that once you’ve registered as self-employed you are REQUIRED to submit a self-assessment tax return, even if you’ve made no money.

How do I start self-assessment?

You need to follow the steps above and register online or log in if you’ve had an account with HMRC previously, then you’ll need to submit a tax return when this is due.

Why do I need to register as self-employed with HMRC?

If you’re self-employed, you must register with HMRC to be legal and compliant. HMRC need to know how much you’re earning to ensure you pay the right amount of tax.

What happens if I don’t register or file my tax return on time?

If you fail to notify HMRC of your self-employment or additional income you earn, you could face a fine or penalty from HMRC. If you’re not sure if you’ve previously registered, you can contact HMRC by using your National Insurance (NI) number and they’ll check if you’ve registered before.

Failing to file a self-assessment tax return once you’ve registered for self-assessment can mean a fairly significant penalty. So employing an accountant that can help and prompt you when your self-assessment tax return is due could save you money in the long run. Don’t run the risk of missing the deadline.

I don’t want to register or file my own tax return, what can I do?

Most people who are self-employed will hire an accountant like dns to register and file their returns for them. This ensures your tax return is filed correctly and on time (as long asyou provide your accountant with all the necessary information). Accountants can also offer advice on what to include on your tax return and give you information on how to save tax.

What responsibilities do I have once I’ve registered as self-employed?

Once you’ve registered, you’ll have a several responsibilities to fulfil. You can seek help from an accountant to ensure you fulfil the responsibilities and what you submit to HMRC is accurate.

Your responsibilities will include:

• Keeping accurate records, particularly of costs and sales.
• As well as income tax you’ll have to pay National Insurance Contributions (NICs). Most self-employed people need to pay Class 2 NIC, and if you make above a certain amount, you may also need to pay Class 4 NIC.
• Filing a self-assessment tax return each year.
• If your annual turnover exceeds £85,000, you’ll need to register for VAT.

At dns we help thousands of people to become self-employed, register online and submit their tax returns. It’s important to do all these things correctly when you become self-employed to avoid facing penalties from HMRC or a large tax bill later down the line.

For help with your self-assessment registration and tax returns, talk to us today on 03300 88 66 86 or email enquiry@dnsaccountants.co.uk or book a free consultation.

About the author

Sumit Agarwal
Sumit Agarwal (ACMA ACA India), the Managing partner of dns accountants is a highly respected accountant with expertise in helping owner-managed businesses.