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How to Register your Business as a Sole Trader

1st January 2022

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How to Register your Business as a Sole Trader

January 2022

In 2021, there were estimated to be 5.6million UK private businesses. Out of these, 3.2million (57%) were sole proprietors, also known as sole traders (source: FSB).

Sole traders are those who run their businesses on their own and are considered self-employed. And whilst it’s easier to set up than a limited company, you still need to register it. It’s the first step in presenting yourself as a legitimate business.

Here we explain the simple steps to registering as a sole trader.

Let’s start at the very beginning

By registering as a sole trader, you are effectively telling Her Majesty’s Revenue and Customs (HMRC) that you are becoming self-employed.

Being self-employed means you will have to tell HMRC what your revenue and expenses are at the end of the trading year. From this you calculate - and pay - the income tax and national insurance owing. You do this with HMRC’s online ‘Self Assessment’ system.

This is how you register:

1. Open your own personal tax account

This is an online account (also called the Government Gateway account) that let’s you view your tax details and manage your dealings with HMRC. To open an account:

  • Go to HMRC’s website

  • Click the green ‘Sign in’ button

  • Click the ‘Create sign in details’ link

  • Enter your email address where requested

You will then be emailed a confirmation code.

  • Use it to confirm your email address

  • Follow the online instructions entering the right information when prompted

You will then be issued with a User ID for your account.

  • Next, pick which type of account you need. Select ‘individual’ for a sole trader

  • Complete the details requested by HMRC for the type of account you’ve selected

2. Plug the Self Assessment tool into your account, by:

  • Signing into your tax account (using your Government Gateway User ID that you received when you first created your tax account)

  • Add Self Assessment to your account

The information you will need to do this is:

  • Your National Insurance number

  • Your name, address and contact details

  • Business name

  • Trading start date

  • Details of your business activities

  • Business address (if you’re working from home, you can state your home address)


3. Receive your Unique Taxpayer Reference

You’ll then be sent a letter within 10 days which has your Unique Taxpayer Reference (UTR). Keep this safe. The UTR is unique to you and you’ll need this when using Self Assessment.

4. Activation code

You will also receive an activation code for your online account. And then you’re done, there’s no need to register with Companies House as a sole trader

Choosing a name for your business

You can trade under your own name, or you could choose a name that describes what your business is about. Your business name does not need to be registered but if you do choose one, you must include it on all official paperwork. 
A word of warning, sole trader business names must not:
  • Include ‘limited’, ‘Ltd’, ‘limited liability partnership’, ‘LLP’, ‘public limited company’ or ‘plc’

  • Be offensive, or include a sensitive word or expression

  • Be the same as an existing trademark—use HMRC‘s trademark search tool to confirm

  • Suggest a connection with government or local authority (unless you have permission)


Let’s talk. We’re Britain’s bank for small businesses. Our Business Banking experts are here to help you with your business, with 25 months’ free day-to-day business banking, as well as 1 year’s free expert business advice from Enterprise Nation. Call 0345 835 3858 or contact us via your business bank account.