Do I Need to Register My New Business with HMRC, and When?

Starting a business in the UK is an exciting journey. Whether you’re freelancing, opening a shop, launching an online venture, or offering consulting services, the administrative side of setting up can easily be overlooked. One of the most critical early steps is ensuring you’ve correctly registered your business with HMRC.

Many new business owners ask:
“Do I really need to register with HMRC — and if so, when?”

The short answer is: yes, in most cases. However, the when and how will depend on your business structure. In this guide, we break down exactly who needs to register, by what deadline, and the implications of missing those deadlines.

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Why Register with HMRC?

Registration with HM Revenue & Customs (HMRC) is not just a formality. It’s a legal requirement that:

• Notifies HMRC that you’re trading or self-employed
• Sets up your tax obligations (Income Tax, National Insurance, Corporation Tax, etc.)
• Triggers the issue of your Unique Taxpayer Reference (UTR)
• Ensures you stay compliant with Making Tax Digital, VAT, and PAYE rules
• Allows you to take advantage of allowable expenses and tax reliefs

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The Business Types and Their HMRC Obligations

1. Sole Traders (Self-Employed)

If you’re working for yourself and not using a limited company structure, you are classed as a sole trader.

You must register with HMRC as a sole trader if:

• You earn more than £1,000 from self-employment in a tax year (6 April to 5 April)
• You want to pay voluntary Class 2 NICs (National Insurance Contributions) for pension benefits
• You want to claim tax-deductible expenses

Registration Deadline

You must register by 5 October following the end of the tax year in which you started your business.

Example:
If you start your business in August 2025, the tax year ends on 5 April 2026. You must register by 5 October 2026.

What You Need to Register:

• Your name, address, and date of birth
• National Insurance number
• Details of your business activity and start date
• Contact details
• An email address and Government Gateway login

After registering, you’ll receive:

• A Unique Taxpayer Reference (UTR) number
• Instructions to file an annual Self Assessment tax return
• Information on how to pay Income Tax and National Insurance

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2. Business Partnerships

A partnership is when two or more people run a business together and share profits.

Both the partnership and each individual partner must register:

• The partnership must register with HMRC as a business entity
• Each partner must register for Self Assessment

Deadline:

Like sole traders, registration must be completed by 5 October following the end of the tax year in which the partnership started trading.

You’ll also need to nominate a ‘nominated partner’ who is responsible for filing the partnership tax return.

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3. Limited Companies

If you choose to incorporate your business, you will be forming a limited company.

Your responsibilities include:

• Registering the company with Companies House (this must be done before you begin trading)
• Registering with HMRC for Corporation Tax within 3 months of starting business activities (e.g. buying stock, advertising, or issuing invoices)

HMRC is notified automatically by Companies House once your company is incorporated, but you must still register separately for Corporation Tax.

You’ll need to:

• Keep formal accounts
• File annual accounts with Companies House
• File a Company Tax Return with HMRC
• Pay Corporation Tax on profits

If you plan to draw a salary or employ staff, you must also:

• Set up a PAYE scheme
• Report payroll information to HMRC under RTI (Real Time Information)

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4. Other Registrations You Might Need

Depending on how you operate, other HMRC registrations might also be necessary:

VAT Registration:

• Mandatory if your VAT taxable turnover exceeds £90,000 in any rolling 12-month period.
• Voluntary VAT registration is allowed even below the threshold, which might be advantageous if you sell to other VAT-registered businesses.

Deadline: You must register within 30 days of exceeding the threshold.

PAYE (Pay As You Earn):

• Required if you pay yourself or others a salary through payroll.
• Must register before the first payday.

Construction Industry Scheme (CIS):

• Contractors and subcontractors in the construction industry may need to register under CIS.

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What Happens If You Don’t Register?

Failing to register your business with HMRC on time could result in:

• Penalties for late registration
• Interest charges on late tax payments
• Loss of allowable expenses you could have deducted
• Challenges if HMRC conducts a compliance check or tax enquiry
• A backlog of paperwork at year-end

You may also lose out on Class 2 NICs, which count towards your state pension entitlement.

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Can You Register Early?

Yes — and in fact, it’s often beneficial to register as early as possible. This gives you more time to set up accounting systems, keep good records, and prepare for your first tax return. It also helps ensure there are no last-minute problems or delays in getting your UTR number.

Early registration is especially helpful if you:

• Want to pay voluntary Class 2 NICs
• Expect to make a profit early on
• Need to open a business bank account (many require proof of registration)

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What Records Should I Start Keeping?

From the moment your business starts, you must keep:

• Records of income (sales invoices, till receipts)
• Records of expenses (bills, bank statements, mileage logs)
• Copies of bank statements
• Details of any loans or assets purchased
• Payroll and VAT records (if applicable)

You must keep these records for at least 5 years (sole traders) or 6 years (limited companies) from the end of the tax year.

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Summary Table

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How Merranti Accounting Can Help

At Merranti, we specialise in helping startups and new businesses get off to the best possible start. From registering with HMRC and Companies House to setting up digital bookkeeping systems, we handle the details so you can focus on running your business.

We can help you:

• Choose the right business structure (sole trader vs limited company)
• Register for taxes on time
• Stay compliant with all HMRC deadlines
• Set up Making Tax Digital (MTD)-compliant software
• Manage VAT, payroll, and bookkeeping from day one

Starting a business? Speak to Merranti Accounting today and avoid costly mistakes down the line.