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Registering Self Assessment for start ups
Starting a new business is an exciting journey, but it comes with its fair share of administrative tasks. One crucial step for many entrepreneurs in the UK is registering for Self Assessment with HMRC. This article will guide you through the process, answering common questions to ensure you’re on the right track.
Do I need to register for Self Assessment?
You must register for Self Assessment if you have to send a tax return and you have not sent one before.
You need to register for Self Assessment if, in the last tax year (6 April to 5 April), any of the following applied:
- You were self-employed as a sole trader and earned more than £1,000. The £1,000 threshold is a measure of gross income, not profit.
- You were a partner in a business partnership.
- Your total taxable income of more than £150,000. Even if you earn less than the £150,000 threshold, you are still required to file a return if you fall into another category e.g. if you are a sole trader and earned more than £1,000.
- You had to pay Capital Gains Tax on the sale of assets.
- You had any untaxed income, such as:
- rental income
- dividends
- interest on savings and investments
- income from overseas sources that are liable to UK tax
- income of £60,000 or more (from 2024/2025 onwards) where you or your partner receives child benefit
- You want to claim tax relief for employment expenses.
- You want to claim tax relief such as the Enterprise Investment Scheme.
- You need to prove you are self-employed e.g. to claim tax-free childcare or the maternity allowance.
- You want to pay voluntary National Insurance contributions.
Failing to register on time can result in penalties, so it’s important to stay on top of these requirements.
How to register for Self Assessment
When to register for Self Assessment
Many clients ask us how do I register for Self Assessment? Thankfully, it is a straightforward process once you have established that you need to register for Self Assessment.
There are different ways to register if you’re self-employed, registering a partner or partnership, or you need to register for any other reason.
- If you are a sole trader registering for the first time you need to sign into your business tax account and select ‘Add a tax to your account to get online access to a tax, duty or scheme’. If you do not have sign-in details you will be able to create them when signing in for the first time. If you cannot register online you can use form CW1F.
- If you are a partner in a business partnership, you’ll need to complete form SA401. You must also register your partnership if you’re the ‘nominated partner’. There are different ways to register for limited liability partnerships and if you’re a partner that’s not an individual, for example, a company or a trust.
- If you are registering for another reason, you will need to do so online and provide your name, address, date of birth, telephone number and National Insurance number (if you have one).
HMRC have an online tool to help guide you on the correct process.
If you’ve previously registered for Self Assessment but didn’t file a tax return last year, you’ll need to register again to reactivate your account.
You must register for Self Assessment by 5 October following the end of the tax year if you have to send a tax return and you have not sent one before. For example, if you started your sole trader business on 1 January 2024 and earned £30,000 of income up to 5 April 2024, you need to register for Self Assessment by 5 October 2024.
Summary
This article has answered the question of how do you register for Self-Assessment and the deadline for registration.
Registering for Self Assessment is a key step in managing your startup’s finances and ensuring compliance with HMRC regulations. By following the steps outlined above, you can navigate this process smoothly and focus on growing your business.
Feel free to reach out if you need more personalised advice or have specific questions about your startup.
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