Self-employment registration (UTR)

A self-employed or sole trader is someone who works for themselves. You must register and declare your profit every year. After registration HMRC assigns each self-assessment taxpayer a different UTR number in order to track their tax records. A UTR number is your 'unique taxpayer reference' number.

When you register as a sole trader, you agree to accept personal financial risk. As your business is not a separate legal entity, you would be personally liable for any debts or legal action against your work. This differs to a limited company, whereby business owners only have limited liability.

As with any business, when you work as a sole trader, you should keep detailed records of all your income and expenses. Basic bookkeeping software can make it easy to log invoices, receipts, and expenses. This makes it easier when the time comes to submit your self-assessment tax return to HM Revenue and Customs (HMRC), which is a legal requirement for all sole traders.