Are you setting up a self employed business?
If so, one of your first steps should be to register with HM Revenue and Customs (HMRC). This is a legal requirement and ensures that your tax and National Insurance contributions will be correctly worked out.
Our guide explains how to go about registering to become self employed and start paying Class 2 National Insurance contributions.
Registering to become self employed
There are three ways that you can register as self employed.
Online
The quickest and most convenient way to register is online. Your online application to HMRC is completely secure and you will receive a letter through the post if any further information is required.
You can register as a sole trader (a business owned and run by one person) or as a partner in a partnership (except limited liability partnerships). All business partners must register separately.
If you’re a partner in a Limited Liability Partnership you can only register by post.
Telephone
In most cases you can register as self-employed by calling HMRC’s Newly Self-employed Helpline on 0845 915 4515. Lines are open from 8.00 am to 8.00 pm Monday to Friday and 8.00 am to 4.00 pm on Saturday (closed Bank Holidays).
Post
If you prefer to register by post you can download and complete HMRC’s form CWF1: ‘Becoming self-employed and being registered for National Insurance contributions and/or tax’.
When to register as self employed
Whilst you cannot register in advance of becoming self employed, you should tell HMRC immediately you start working for yourself. If you delay registering, you may have to pay a penalty.
The information you will need to provide when you register as self employed
When registering to become self employed, you will have to provide information including:
• Your name and address
• Your National Insurance number
• Contact details including an e-mail address and telephone number
• The date your self employment commenced
• The nature of your business, its registered address and telephone number
• Your Unique Taxpayers Reference if you have one
Arranging to pay your Class 2 National Insurance contributions
As well as registering as self employed you will also have to arrange to pay your Class 2 National Insurance contributions (unless you expect your earnings to be very low in which case there is an exception).
Most self employed people pay their Class 2 National Insurance contributions by direct debit. It is easy to manage, will ensure your contributions are paid and it runs automatically, meaning you do not have to remember to make your payments.
If you do not pay by Direct Debit, you will receive quarterly bills in January, April, July and October.
