REGISTERING AS SELF EMPLOYED

Once you set up as self-employed you will be responsible for paying your own income tax and National Insurance (NICs). You must register with HMRC within three months of starting trading, even if you already pay tax via self assessment and this can be done online or by calling HMRC.

Establishing your employment status

It is important to know your employment status because it affects how you pay tax and NICs. Use HMRC's Check Employment Status for Tax (CEST) tool at the outset to help confirm your status.

Paying income tax and National Insurance Contributions

If you are self-employed you have to calculate your income tax and submit a self assessment tax return to HM Revenue & Customs.  National Insurance for the self-employed has changed since April 2024:

Class 2 NICs — the flat weekly Class 2 charge was abolished from April 2024. If your profits are at or above the Small Profits Threshold (£7,105 for 2026/27), your National Insurance record is automatically protected without you paying anything separately. If your profits fall below this threshold, you can choose to pay voluntary Class 2 contributions (£3.65 a week for 2026/27) to keep building towards your State Pension.

Class 4 NICs — if your taxable profits exceed £12,570 (the Lower Profits Limit for 2026/27), you'll pay Class 4 contributions at 6% on profits between £12,570 and £50,270, and 2% on profits above £50,270. This rate has fallen from 9%/2% in recent years following successive reductions.

Both are calculated and paid through your Self Assessment return, alongside income tax, on 31 January and 31 July.  If your gross self-employment income exceeds £50,000, note that Making Tax Digital for Income Tax now requires quarterly digital updates rather than a single annual return, effective from April 2026 — see our Making Tax Digital for IT page for details.

Self-Employed pages ► Self Employed sole traders ■ Registration and National Insurance ■

■ Record keeping ■ Allowable Expenses ■ Home Working Costs ■ Fixed Rate Expenses ■

■ Cash Basis for the Self-Employed ■ Registering for VAT ■ Forming a Limited Company ■

Registered office: 61 Friar Gate, Derby, Derbyshire, DE1 1DJ   T: 01332 202660

Adrian Mooy & Co is the trading name of Adrian Mooy & Co Ltd.  Registered in England No. 05770414