Knowing how to register as self-employed is the first practical step in turning freelance work into a legitimate business. Getting registered correctly and on time protects you from penalties and sets up your finances cleanly from the start.
The registration process differs significantly between the UK and the US. In the UK, there’s a specific registration with HMRC and a firm deadline attached. In the US, the concept of becoming self-employed is broader and more decentralised, varying by state and business structure. This guide covers both, step by step, so you can follow the process relevant to your situation.
What does it mean to be self-employed?
Being self-employed means you work for yourself rather than for an employer. You set your own rates, choose your clients, and are responsible for your own tax and National Insurance (in the UK) or self-employment tax (in the US). You are your own business, even if that business is just you.
The terminology varies. In the UK, the most common structure for individual self-employed people is the sole trader. In the US, the equivalent is the sole proprietor. Both mean the same thing: you and your business are the same legal entity. Your personal finances and your business finances are legally the same, which is why keeping them practically separate matters so much.
A limited company (UK) or an LLC (US) is a separate legal structure in which the business becomes a separate legal entity from you. This provides liability protection and can be tax-efficient at higher income levels, but it entails additional administrative requirements and is not necessary for most freelancers starting out.
For a detailed comparison of how taxes work differently as a freelancer versus an employee, see our guide on the freelancer vs employee tax comparison.
How to register as self-employed in the UK
In the UK, registering as self-employed means registering for Self Assessment with HMRC. This is the system through which you report your income and pay your tax each year. You must register by 5th October, following the end of the tax year in which you started trading. The UK tax year runs from 6th April to 5th April. So if you started freelancing in January 2026 (within the 2025 to 2026 tax year), you must register by 5 October 2026.
Missing this deadline can result in a penalty, so register as soon as you start earning, and don’t wait until the deadline approaches.
Here is the step-by-step process:
- Create a government gateway account. Go to gov.uk/register-for-self-assessment. If you don’t already have a Government Gateway account, you’ll need to create one. You’ll need your National Insurance number, a form of photo ID (passport or UK driving licence), and a UK address.
- Register for Self Assessment. Once you have your Government Gateway account, register for Self Assessment. Select “I am self-employed” as your reason for registering. You’ll be asked to provide your business start date, what type of work you do, and whether you’ve already been sent a tax return.
- Receive your Unique Taxpayer Reference (UTR) number. HMRC will post your UTR number to your registered address within 10 working days (21 days if you’re abroad). This is a ten-digit number that identifies you to HMRC and is required for every tax return you file. Keep it somewhere safe.
- Set up your business records. From the date you registered, you’re required to keep records of all your income and business expenses. HMRC can request these records going back six years. A simple spreadsheet works for most sole traders, though accounting software becomes easier to use as income grows.
- Understand your National Insurance obligations. As a self-employed sole trader, you pay Class 2 National Insurance (a flat weekly rate, collected through Self Assessment) and Class 4 National Insurance (a percentage of profits above the lower profits threshold). Both are collected when you file your Self Assessment tax return each year.
- File your first Self Assessment tax return. Your first return covers the tax year in which you started trading. The deadline to file online is 31 January following the end of that tax year. Payment of any tax owed is due on the same date.
Sole trader vs limited company in the UK
Most freelancers starting out register as sole traders. It’s simpler, cheaper to administer, and appropriate for most income levels. A limited company becomes an option when your profits consistently exceed around £50,000 per year, because the corporation tax rate is lower than the higher rate of income tax, and you have more flexibility in how you extract income. If you’re unsure which structure suits your situation, a UK accountant can advise based on your projected income.
How to register as self-employed in the US
In the US, there is no single federal registration that makes you officially “self-employed.” Self-employment is a tax status, not a legal one. When you earn income from freelance work or run a sole proprietorship, you become self-employed by default and file taxes accordingly. The required registration depends on your business structure, your state, and the nature of your work.
Here is the step-by-step process for a US sole proprietor:
- Decide on your business structure
Most freelancers start as sole proprietors: no registration required, simplest taxes, and no separation between you and the business. An LLC (Limited Liability Company) adds liability protection, especially if your work carries any financial or legal risk to personal assets. An S-Corp becomes relevant at higher income levels for tax efficiency reasons. For most people starting out, a sole proprietorship is the appropriate starting point. - Get an Employer Identification Number (EIN) if needed
A sole proprietor with no employees can use their Social Security Number (SSN) as their tax identifier. However, an EIN (a nine-digit number assigned by the IRS) is required if you have employees, operate as an LLC or corporation, or want to open a business bank account without using your SSN. Apply for a free EIN at irs.gov. The IRS issues EINs immediately online. - Register your business name if trading under anything other than your own name
If you want to trade as “Bright Design Studio” rather than your legal name, you’ll need to file a DBA (Doing Business As) or fictitious business name registration with your county or state. Requirements and fees vary by location. - Check your state and local licence requirements
Most states require a general business licence, and some require specific licences depending on your profession. Some states and cities also require registration if you’ll be collecting sales tax on goods or services. Check your specific state’s requirements, as they vary significantly. - Understand your federal tax obligations
As a self-employed sole proprietor, you file Schedule C (Profit or Loss from Business) with your Form 1040 federal tax return each year. You also file Schedule SE to calculate self-employment tax (15.3% on net earnings, covering Social Security and Medicare). The IRS provides detailed guidance at irs.gov/businesses/small-businesses-self-employed. - Make quarterly estimated tax payments
Unlike employees, self-employed people don’t have tax withheld from each payment. You’re expected to pay estimated taxes quarterly: due on 15 April, 15 June, 15 September, and 15 January. Failing to do so can result in an underpayment penalty at year-end.
Sole proprietorship vs LLC vs S-Corp in the US
A sole proprietorship requires no registration and has the simplest taxes, but offers no personal liability protection. An LLC provides liability protection (your personal assets are separate from business liabilities) and allows you to choose how it’s taxed. An S-Corp election is a tax classification that can reduce self-employment tax at higher income levels, typically above $50,000 to $80,000 in net profit, but requires additional administrative work, including payroll. Most freelancers start as sole proprietors and reconsider their structure as income grows.
What you need before registering
Gathering the right information before you start the registration process saves time and avoids incomplete applications.
In the UK:
- National Insurance number
- Personal details (full name, date of birth, address)
- Business name (or your own name if trading under it)
- Business start date
- Description of your self-employed work
- Contact details for your business
In the US:
- Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN)
- Business name (if different from your legal name)
- Business address
- Business start date
- Type of business activity
- State of primary business operations
- EIN application details for forming an LLC or hiring employees
Both countries will also ask about your expected income when you register. This is used to estimate your tax liability and, in the UK, to set your payment-on-account amounts. Don’t overthink this: a rough estimate is fine. You’ll reconcile the actual figures when you file.
What to do after you register
A few practical steps immediately after registering set up your finances cleanly and protect you from common problems later.
Open a separate account for business income
This is the single most effective financial habit for a new freelancer. When your freelance income and personal spending share one account, every tax filing becomes a manual sorting exercise. A separate account means every transaction is automatically categorised: income that lands there is business income, expenses paid from it are business expenses. If you work with international clients, this account should be able to receive payments in foreign currencies without forcing immediate conversion at your bank’s rate.
Start tracking income and expenses immediately
Both HMRC and the IRS require you to keep records of your business income and expenses. Start from your first paid invoice, not from when your income becomes significant. A spreadsheet works. Accounting software such as FreeAgent (common in the UK) or QuickBooks (common in both markets) makes it easier to generate reports as needed.
Make estimated tax payments or save for your tax bill
In the US, make quarterly estimated payments to avoid underpayment penalties. In the UK, save approximately 20 to 30% of each invoice payment toward your Self Assessment tax bill, held separately so it’s not accidentally spent.
If you work with international clients, set up a multi-currency account
Set up a multi-currency account that can receive USD, EUR, or GBP from clients abroad without losing a percentage to bank conversion margins on every payment. Open a multi-currency account with Grey to receive international payments in the currencies your clients use, hold the balance until you choose to convert, and withdraw to your main account. Grey lets you receive international payments with a transparent 1% conversion fee, capped at $6, rather than the 3 to 5% spread typical at most banks.
Download the grey app today.
Common mistakes to avoid when registering
Missing the registration deadline in the UK
The 5 October deadline for Self Assessment registration is firm. HMRC issues automatic penalties for late registration. Register as soon as you start earning, not when you think income is “significant enough.”
Mixing personal and business finances
Using your personal account for freelance income creates accounting and tax filing complexity that grows over time. Opening a separate account from the first payment is far easier than untangling mixed finances later.
Failing to keep receipts and records
You can only claim business expenses you can substantiate. HMRC can investigate up to six years back; the IRS up to three years (six if it suspects underreporting). Keep records of every expense with the corresponding receipt or invoice.
Choosing the wrong business structure for your earnings level
Most freelancers do fine as sole traders or sole proprietors. Registering as a limited company or LLC before you need to adds administrative cost and complexity without a proportionate tax benefit at lower income levels. Get advice before adding structure.
Not saving for tax
This is the most common cash flow problem in year one of self-employment. Your tax bill arrives as a lump sum at year’s end. If you haven’t been setting money aside throughout the year, it can be a shock. Save a percentage of every payment into a separate account from day one.
Frequently asked questions
When do I need to register as self-employed?
In the UK, you must register for Self Assessment by 5 October following the end of the tax year in which you started trading. The UK tax year runs from 6 April to 5 April. So if you started earning in August 2025, you must register by 5 October 2026. In the US, there is no formal registration deadline for sole proprietors. You become self-employed the moment you earn income from self-employment and must file taxes accordingly for that year.
Can I be employed and self-employed at the same time?
Yes. In both the UK and the US, having a regular employed job alongside freelance income is entirely legal and common. In the UK, you register for Self Assessment to report your self-employed income separately from your employment income. Tax is deducted at source through PAYE on your employed income, and Self Assessment covers the self-employed portion. In the US, your freelance income is reported on Schedule C alongside your W-2 employment income on your Form 1040.
Do I need a business name to register as self-employed?
No. You can register and trade under your own legal name without a separate business name in both the UK and the US. If you want to trade under a different name, such as a studio or agency name, you’ll need to register that separately: as a business name with HMRC in the UK, or as a DBA (Doing Business As) filing in your county or state in the US.
What is a UTR number?
A UTR (Unique Taxpayer Reference) is a ten-digit number issued by HMRC to identify you as a taxpayer in the UK. You receive it after registering for Self Assessment and use it on every tax return you file. It is specific to you and doesn’t change. Keep it safe. If you lose it, you can find it on any HMRC letter or in your online tax account.
What is the difference between an EIN and a UTR?
Both serve as tax identification numbers for self-employed people, but in different countries. A UTR is issued by HMRC in the UK and is used for Self Assessment filings. An EIN (Employer Identification Number) is issued by the IRS in the US and is required for businesses with employees, LLCs, and corporations. A US sole proprietor with no employees can use their Social Security Number in place of an EIN and is not required to get one.
Can I receive payments from international clients into my Grey account as a freelancer?
Yes. Grey provides multi-currency accounts with local banking details in USD, EUR, and GBP. You provide your Grey account details on your invoices to international clients, and they pay as if they're paying a local account in their country. Payments arrive in your Grey balance without SWIFT wire deductions. You hold the balance in the foreign currency and convert when you choose, at a 1% conversion fee capped at $6, with the rate shown before you confirm. This is significantly cheaper than sending international wire transfers through a standard UK or US bank account.
Open a multi-currency account with Grey or download the app.
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