How do I register as self-employed in the UK?

You need to register with HMRC for Self Assessment by 5 October in your second tax year of trading. You can register online through the HMRC website. If you're setting up a limited company, you also need to register with Companies House. Registration is free and straightforward.

Should I be a sole trader or limited company?

Sole trader is simpler and suits most people earning under £30,000-£40,000 in profit. A limited company can be more tax-efficient at higher profits because you can pay yourself through a combination of salary and dividends, but it comes with additional admin, accountancy costs, and Companies House obligations. The right choice depends on your profit level, plans, and appetite for paperwork.

How much tax do I pay as self-employed?

Self-employed people pay income tax on their profits (after deducting allowable business expenses) at the same rates as employed people: 0% on the first £12,570, 20% up to £50,270, 40% up to £125,140, and 45% above that. You also pay Class 2 and Class 4 National Insurance contributions on your profits.

What expenses can I claim as self-employed?

You can deduct legitimate business expenses from your income before calculating tax. Common claims include office costs, travel, professional subscriptions, phone and internet, marketing, insurance, and accounting fees. If you work from home, you can claim a proportion of household costs including heating, lighting, and broadband.

Do I need an accountant if I'm self-employed?

It's not legally required, but an accountant can save you money through tax planning, ensure you claim all allowable expenses, and handle your Self Assessment and VAT returns. Many sole traders manage with accounting software (like FreeAgent or Xero) for day-to-day bookkeeping and use an accountant only for year-end returns.

Can I claim benefits if I'm self-employed?

Yes. Self-employed people can claim Universal Credit (subject to the minimum income floor after 12 months), Maternity Allowance, and other benefits. You're generally not entitled to Statutory Sick Pay, Statutory Maternity Pay, or employer-funded benefits, but there are alternatives available.

Self-Employment Guides UK — Tax, Business Setup, and Running Your Own Business

Self-Employment — The Complete UK Guide (2026)

Everything you need to know about being self-employed in the UK. From registering as a sole trader or forming a limited company, to tax, expenses, IR35, invoicing, and financial planning.

By PocketWise · 8 April 2026 · 5 min read

Self-employment tax and business information is based on current HMRC rules. This is not tax or accounting advice. Consider consulting a qualified accountant for your specific circumstances.

Self-employment is a way of life for over 4 million people in the UK — from freelancers and contractors to sole traders running established businesses. Whether you’re just starting out, deciding between a sole trader and limited company structure, or managing the complexities of IR35, tax returns, and business expenses, the self-employment landscape has its own set of rules that differ significantly from employment.

The financial rewards of self-employment can be substantial: the ability to set your own rates, choose your clients, claim legitimate business expenses against tax, and structure your income tax-efficiently. But with those rewards come responsibilities — filing Self Assessment tax returns, paying National Insurance contributions, managing cash flow, and planning for periods without income.

Understanding your obligations and rights as a self-employed person is essential from day one. Getting your business structure right, keeping accurate records, claiming all allowable expenses, and planning for tax bills can make the difference between self-employment that thrives and self-employment that struggles.

This guide brings together every self-employment article on PocketWise, covering everything from getting started and choosing your business structure to managing tax, expenses, contracts, and financial planning.

Getting Started & Business Structure

Choosing the right legal structure and registering properly is the foundation of self-employment.

How to Register as Self-Employed UK — Step-by-step instructions for registering with HMRC, key deadlines, and what information you’ll need.
Starting a Business Guide UK — A comprehensive guide to starting a business in the UK, from business planning to legal requirements.
Contractor vs Freelancer vs Sole Trader — The practical and legal differences between these self-employed categories and which applies to you.
How to Set Up a Limited Company — A step-by-step guide to incorporating a limited company, including Companies House registration and setup costs.
Should I Set Up a Limited Company? — A decision framework for choosing between sole trader and limited company based on your earnings, plans, and risk appetite.
Partnership Tax & Structure Guide — How business partnerships work in the UK, including tax responsibilities and profit sharing.
Closing a Limited Company Guide — How to wind down a limited company, including striking off, voluntary liquidation, and final tax obligations.

Self-Employment Tax & Accounting

Understanding your tax obligations is crucial. These guides cover everything from tax rates to the choice between cash basis and accrual accounting.

Freelancer Tax Guide UK — A comprehensive tax guide for freelancers, covering income tax, National Insurance, expenses, and payment on account.
National Insurance Self-Employed — How Class 2 and Class 4 NI contributions work for self-employed people, including rates and thresholds.
Cash Basis vs Accrual Accounting — Choosing between the two accounting methods for your Self Assessment and understanding the cash basis threshold.
Ltd Company vs Sole Trader Tax — A side-by-side comparison of the tax treatment for sole traders versus limited company directors at different profit levels.
Small Business Tax Tips UK — Practical strategies for legally reducing your self-employment tax bill.
Gig Economy Tax Guide UK — Tax responsibilities for gig economy workers, delivery drivers, and platform workers.
Flat Rate VAT Scheme Guide — How the flat rate VAT scheme works, whether it saves you money, and when to use standard VAT accounting instead.

Expenses & Financial Management

Claiming the right expenses and managing your business finances effectively reduces your tax bill and improves cash flow.

Business Expenses Self-Employed — A comprehensive list of allowable self-employed expenses, from office costs to travel, with HMRC rules for each category.
Claiming Mileage Self-Employed UK — How to claim business mileage using HMRC’s simplified mileage rates and what records to keep.
Contractor Expenses Limited Company — Expenses you can claim through a limited company, including those not available to sole traders.
Director’s Loan Account Guide — How director’s loan accounts work, the tax implications of borrowing from your company, and how to avoid Section 455 tax.
How to Pay Yourself from a Limited Company — The most tax-efficient strategy for extracting profit through salary, dividends, and pension contributions.
Best Bank Accounts for Self-Employed — A comparison of business bank accounts for sole traders and limited companies, including free options.
Small Business Grants UK — Government and private grants available to small businesses and self-employed people in the UK.

Contracting & Freelancing

Guides specific to contractors and freelancers, including day rates, invoicing, and the choice between umbrella and limited company work.

Contractor Day Rate to Salary — How to convert a contractor day rate into an equivalent permanent salary, accounting for holidays, pension, and benefits.
PAYE vs Umbrella vs Limited — Comparing the three main ways to work as a contractor and the tax, take-home pay, and admin implications of each.
Umbrella Company Explained — How umbrella companies work, what you can expect to take home, and when an umbrella is the right choice.
How to Invoice Correctly as a Freelancer UK — Legal requirements for invoices, payment terms, and how to chase late payments.
How to Set Freelance Rates UK — A framework for pricing your services, understanding market rates, and negotiating with clients.
CIS Construction Industry Scheme Explained — How CIS deductions work for construction subcontractors and how to claim back overpaid tax.

Benefits & Protections for the Self-Employed

Self-employed people have different entitlements to employed workers. These guides cover the support available.

Can I Get Maternity Pay If Self-Employed? — Why self-employed women aren’t entitled to SMP but can claim Maternity Allowance instead.
Self-Employed Maternity Allowance Guide — How to claim Maternity Allowance, eligibility criteria, current rates, and how long it lasts.
Self-Employed & Pregnant — Financial Rights — A complete guide to financial support during pregnancy for self-employed women.
Self-Employed Statutory Sick Pay — Why self-employed people aren’t entitled to SSP and what alternatives are available, including income protection insurance.
Self-Employed Pension Options — Building a pension without an employer contribution, including SIPPs, stakeholder pensions, and the tax relief available.

Mortgages & Insurance for the Self-Employed

Getting a mortgage or the right insurance as a self-employed person requires a different approach.

Self-Employed Mortgage — How Much Can I Borrow? — How lenders assess self-employed income, documentation requirements, and tips for maximising your borrowing.
Business Insurance Self-Employed Guide — The types of business insurance self-employed people should consider, from public liability to professional indemnity.
Business Rates Explained — How business rates work, small business rate relief, and when you need to pay them.