Last updated: 18 October 2026
Becoming self-employed in the UK: a 2026/27 guide
Working for yourself as a sole trader is the simplest way to start a business. You keep the profits, but you are responsible for your own tax and National Insurance. Here is what you need to know, alongside our guide above.
Registering with HMRC
You must register for Self Assessment as self-employed by 5 October after the end of the tax year in which you started trading. If you start in June 2026, the deadline is 5 October 2027. If your trading income is £1,000 or less in a tax year, the trading allowance may mean you don't need to register. Step-by-step help is in our guide to registering as self-employed.
Tax and National Insurance
- Income Tax on profits above the £12,570 Personal Allowance: 20% up to £50,270, 40% up to £125,140 and 45% above.
- Class 4 National Insurance: 6% on profits between £12,570 and £50,270, and 2% above.
- Class 2 National Insurance is no longer compulsory. If your profits are below the £7,105 small profits threshold, you can pay it voluntarily (£3.65 a week) to protect your State Pension record.
Estimate your bill with our self-employed tax calculator.
Deadlines and payments on account
The 2025/26 tax return and any balance owed are due online by 31 January 2027. If your bill is over £1,000, you will usually also make two payments on account towards next year's tax, on 31 January and 31 July.
Making Tax Digital for Income Tax
From 6 April 2026, sole traders and landlords with combined qualifying income over £50,000 must use Making Tax Digital. That means keeping digital records and sending quarterly updates to HMRC through compatible software. The threshold falls to £30,000 from April 2027 and £20,000 from April 2028. Our MTD accountants can set you up.
VAT and records
Register for VAT if your taxable turnover goes over £90,000 in a rolling 12 months. Keep records of income and expenses for at least 5 years after the 31 January filing deadline. See what you can claim in our self-employed expenses guide.
Self-employed FAQs
Can I be employed and self-employed at the same time?
Yes. Your salary is taxed through PAYE and your self-employed profit through Self Assessment. Try our employed and self-employed calculator.
When should I switch to a limited company?
Often when profits regularly pass about £50,000. See our limited company guide.
Let an accountant take the stress out of tax. Our self-employed accountants file your tax return, claim every allowable expense and get you ready for MTD, for a fixed fee. See our self-employed packages or call 0800 644 1258.