Congratulations on starting up your own business!
By now you're wondering how to go about registering for self assessment or registering as a sole trader. You've probably already given it a quick Google and seen a dozen or so HMRC links with a lot of circular references- we're going to cut through all of that with this relatively simple guide to registering a business with HMRC.
First though, we'll take a quick look at when you need to register as self employed. HMRC use the terms "self employed" and "sole trader" interchangeably, so don't be put off by the jargon.
If your turnover (not profit) is more than £1,000 for the tax year then you have to tell HMRC that you're in business. You'll have to register as a sole trader/ for self assessment if you need to prove that you're self employed in order to claim tax-free childcare and other benefits or if you want to make voluntary Class 2 National Insurance payments to help you qualify for benefits.
(Even if you've made a loss in your first year it's worth registering- that loss can be carried forward to be used against trading profits or it can be utilised in the current tax year against other income i.e. income from employment)
You have to register by the 5th October in the tax year after you started trading (e.g. if you started trading on 1st March 2021 then you'd have to register your business with HMRC by the 5th October 2021.
Follow the link below and select the option to register online with HMRC!