UK Going Self-Employed Checklist (2026/27)
Going self-employed 2026/27: registering for Self Assessment by 5 October, Class 2 and 4 NI, records, VAT at £90,000, MTD, insurance and payments on account.
Setup checklist
| Area | Action | Priority |
|---|---|---|
| HMRC registration | Register for Self Assessment as self-employed by 5 October after the end of the tax year in which you started (for a start in 2026/27, by 5 October 2027). Registering late can lead to a penalty. Registration also sets you up for Class 2 and Class 4 National Insurance. | Day 1 |
| National Insurance | Profits of £7,105 or more: Class 2 is treated as paid, protecting your NI record at no cost. Below that you can choose to pay voluntary Class 2 at £3.65 a week. Class 4 is 6% on profits from £12,570 to £50,270 and 2% above, collected through Self Assessment. | Day 1 |
| Business name | You can trade under your own name or a business name. A sole trader name must not include "limited", "Ltd", "LLP" or "plc", must not be offensive, and must not be too similar to another business's trade mark. Include your name and any business name on official paperwork such as invoices and letters. | Week 1 |
| Bank account | A sole trader does not legally need a separate business account, but one makes records much easier. Check the bank's terms for business use. | Week 1-2 |
| Insurance | Professional indemnity and public liability cover are not legal requirements but are commonly expected by clients. Employers' liability insurance is a legal requirement in England, Scotland and Wales once you employ someone, with exceptions such as only employing close family. | Week 1-2 |
| Records and software | Keep records of income and expenses from day one. Making Tax Digital for Income Tax needs compatible software once your qualifying income passes the threshold (over £50,000 in 2024-25: from 6 April 2026; over £30,000 in 2025-26: from 6 April 2027; over £20,000 in 2026-27 and later: from 6 April 2028). | Week 2-4 |
| Keeping records | Receipts (digital copies are fine), invoices, bank statements, a mileage log and home-working hours if you use flat rates. Keep them for at least 5 years after the 31 January submission deadline for the tax year. | Day 1 ongoing |
| VAT | Register if taxable turnover in the last 12 months goes over £90,000, or you expect it to go over in the next 30 days. Voluntary registration is possible below it. | When approaching £90,000 |
| Contracts and terms | Written terms covering scope, price, payment dates and late payment reduce disputes. Take legal advice for anything high-value. | Week 3-4 |
| Pension | No employer auto-enrolment, so set up a personal pension or SIPP if you want one. Relief is limited to 100% of your earnings (or £3,600 gross if lower) within the £60,000 annual allowance. | Month 1-3 |
| Cash buffer | There is no Statutory Sick Pay when self-employed and income is irregular. See our emergency fund guide. | Month 1-6 |
| Income protection | Self-employed people do not get SSP. Income protection insurance can replace part of your income if you cannot work through illness or injury; compare terms such as the deferral period. | Month 1-3 |
Income Tax on profits uses the Scottish rates for Scottish taxpayers; National Insurance, VAT and Self Assessment registration are the same across the UK.
Related guides
- UK Sole Trader vs Limited Guide - structure decision.
- UK Class 2 + Class 4 NI 2026/27 - NI mechanics.
- UK MTD ITSA Penalty Points 2026/27 - MTD compliance.
- UK Self-Employed Expenses Checklist 2026/27 - allowable expenses.
- UK SA Deadlines + Penalties 2026/27 - timing rules.
Frequently asked questions
When do I need to register with HMRC?
By 5 October after the end of the tax year in which you started. If you started self-employment during 2026/27 (6 April 2026 to 5 April 2027), register by 5 October 2027. Registering late can lead to a penalty, which under Finance Act 2008 Sch 41 is based on the tax unpaid because of the failure. Registering as self-employed sets up Self Assessment and your Class 2 and Class 4 National Insurance, and HMRC sends you a Unique Taxpayer Reference (UTR). You do not need to register if your gross trading income is £1,000 or less and you have no other reason to file.
How do Class 2 and Class 4 National Insurance work now?
Since 6 April 2024 nobody has to pay Class 2. If your profits are £7,105 or more in 2026/27, Class 2 is treated as paid, which protects your National Insurance record. Below that you can choose to pay voluntary Class 2 at £3.65 a week (£189.80 a year) to keep building qualifying years. Class 4 is 6% on profits over £12,570 up to £50,270 and 2% above, worked out and collected through Self Assessment. See our Class 2/4 NI guide.
Should I be a sole trader or a limited company?
A sole trader is simpler: profits are taxed as your income, with Class 4 NI, and you are personally liable for business debts. A limited company is a separate legal entity with limited liability; it pays Corporation Tax and you take money out as salary or dividends, with Companies House and company tax filings each year. Which is better depends on your profit, how you will take money out and your liability risk. See our sole trader vs limited guide.
What insurance do I actually need?
Employers' liability insurance is a legal requirement in England, Scotland and Wales once you employ anyone, unless an exception applies (for example you only employ close family), and you can be fined £2,500 for every day you are not properly insured. Other cover is optional: professional indemnity (claims for negligence or mistakes), public liability (injury or damage to third parties), cyber and equipment cover. Clients or contracts may require some of them. Compare quotes for your trade.
What can I claim as expenses?
Costs incurred wholly and exclusively for the business (ITTOIA 2005 s.34). For example: the business part of phone and internet bills, professional subscriptions, software, insurance, advertising, stock and materials. Flat rates are optional: business mileage at 55p a mile for the first 10,000 miles and 25p after, and working from home at £10, £18 or £26 a month for 25 to 50, 51 to 100 or 101 or more hours. Instead of claiming expenses you can deduct the £1,000 trading allowance, which is better only if your expenses are lower.
When do I need to register for VAT?
When your taxable turnover in the last 12 months goes over £90,000, register within 30 days of the end of the month in which you went over; you are registered from the first day of the second month after that. You must also register if you expect to go over £90,000 in the next 30 days alone. Voluntary registration below the threshold lets you reclaim VAT on costs, but you must then charge VAT and file returns.
When are tax payments due?
The balancing payment for a tax year is due by 31 January after it ends. If last year's bill was £1,000 or more, and less than 80% of it was collected at source, you also make payments on account towards the next year: half of last year's bill by 31 January and half by 31 July. On a first tax return that means paying the whole first year's bill plus half of it again by 31 January. Example: a 2025/26 bill of £8,000 means £12,000 by 31 January 2027 (the £8,000 plus a £4,000 first payment on account for 2026/27) and £4,000 by 31 July 2027.
When does Making Tax Digital for Income Tax apply?
It depends on your qualifying income (gross self-employment and property income) in an earlier tax year: over £50,000 in 2024-25: from 6 April 2026; over £30,000 in 2025-26: from 6 April 2027; over £20,000 in 2026-27 and later: from 6 April 2028. Once in, you keep digital records in compatible software and send quarterly updates, then a final declaration by 31 January. HMRC writes to people it expects to be mandated, but it is your responsibility to check. See our MTD penalty points guide.