How do I register as a sole trader in the UK?

To register as a sole trader, you need to register with HMRC first. You can do this by: applying online and filling out the self-registration form, sending the registration form via post to HMRC, or contacting HMRC on 0300 200 3310. Registration is required once your self-employed income exceeds £1,000 in a tax year.

What is a sole trader?

A sole trader is a self-employed person who runs one or more businesses on their own. There's no legal difference between the person and the business. You keep the profits but are also personally responsible for debts and obligations. If something goes wrong, your personal assets may be at risk.

Do I need to register my business at Companies House as a sole trader?

No, you don't need to register your business at Companies House as a sole trader. However, you do need to register with HMRC for Self-Assessment to pay your income tax. There is no registration fee, and you don't need directors, shareholders, or partners.

What are the legal obligations of a sole trader?

Legal obligations of a sole trader include: registering for Self-Assessment with HMRC, filing tax returns every year, keeping records of all business income and expenses, choosing a unique business name, registering for VAT if turnover exceeds £85,000, obtaining necessary licenses for certain professions, and registering for PAYE if you employ people.

When do I need to register for VAT as a sole trader?

Registering for VAT as a sole trader is not compulsory unless you cross the turnover limit of £85,000. If you do exceed this threshold, it becomes compulsory to register for VAT. Once registered, you need to charge VAT from your customers, fill out VAT return forms, and pay VAT to HMRC.

Can a sole trader have multiple businesses?

Yes, a sole trader can legally run multiple businesses at the same time. About 3.1 million sole traders in the UK operate multiple businesses. You don't need to register each business separately with HMRC. All your businesses fall under one Unique Tax Reference (UTR), and you report them separately in the same Self-Assessment tax return, with each business having its own trade section.

Do I need to register each business separately if I'm a sole trader with multiple businesses?

No, you don't have to register each business separately with HMRC if you are already a sole trader. You'll have one Unique Tax Reference (UTR), and all your businesses are under that UTR. You report them separately in the same Self-Assessment tax return, with each business having its own trade section.

How does VAT work when running multiple businesses as a sole trader?

VAT registration applies to you as an individual, not to each business separately. If your combined taxable turnover from all businesses exceeds £90,000 in any rolling 12-month period, you must register for VAT. All your taxable business activities fall under that single VAT registration. Trying to split businesses artificially to avoid VAT is known as 'business splitting' and HMRC can impose penalties and backdated VAT liabilities.

What records do I need to keep as a sole trader?

You need to legally keep records of all your business income and expenses. This includes bank receipts, invoices, bank statements, cheques, and slips. Additionally, you need PAYE records if you have employees and VAT records if you are VAT registered. These records serve as evidence for your business and may be required by HMRC.

What is the trading allowance for sole traders?

There is a trading allowance of £1,000 per tax year. If your total income from self-employment across all businesses is under that amount, you might not need to pay Income Tax on that income or even register for Self-Assessment in some cases. However, once your income exceeds £1,000, you must register for Self-Assessment and declare the full amount.

Can I use 'Ltd' in my sole trader business name?

No, you cannot use 'Ltd' with your sole trader business name. As a sole trader, you must choose a business name that is unique and different from others, and use this name on your paperwork like invoices. You also need to avoid using sensitive words in your business name.

Do I need a license to operate as a sole trader?

Most professions don't need a license. However, some businesses like those selling alcohol need to have a license. Certain professions like doctors, accountants, and lawyers also need to be licensed. The requirement depends on the type of business you operate.

What happens if I employ people as a sole trader?

If you employ people in your sole trading business, you need to legally register for PAYE (Pay As You Earn). You'll need to be concerned about payroll, employer's National Insurance Contributions, and employee benefits like sick or maternity pay. You must register as an employer with HMRC and deduct National Insurance and Income Tax from eligible employees' pay.

How many sole traders are there in the UK?

There are around 3.5 million sole traders in the UK, making up 59% of the UK private sector business population. However, according to the Institute for Fiscal Studies, 20% of sole traders fail within their first year, and 60% don't make it past five years.

How to Register as a Sole Trader as a Healthcare Professional in the UK?

Deciding to work for yourself in the UK healthcare sector is a huge step. And the most common way to start is to register as a sole trader.

It is simple, cost-effective, and gives you full control. However, the rules around tax and digital reporting are changing, especially with the 2026 updates from HMRC.

In this guide, we will walk you through exactly how to register as a sole trader.

Let’s get into it!

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What Does It Mean To Register as a Sole Trader?

When you register as a sole trader, you are telling HMRC that you are self-employed and responsible for your own tax. Instead of being paid only through PAYE, you manage your income, expenses, and annual Self Assessment tax return yourself.

Many healthcare professionals prefer this structure because:

It is quick to start
You keep full control of your income
Costs are usually lower in the early stages
There is less admin compared to a limited company

You and your business are legally the same entity, which means profits belong to you personally. You pay Income Tax on these profits if they exceed your Personal Allowance (which is £12,570 for most people but reduces if you earn over £100,000).

You also pay Class 4 National Insurance at a rate of 6% on profits between £12,570 and £50,270 (and 2% on anything above that).

Compulsory Class 2 National Insurance has been abolished for most; if your profits are above £6,845, you are ‘deemed’ to have paid it. However, you may still choose to pay it voluntarily if your profits are below that level to protect your State Pension.

Who Needs To Register as a Sole Trader?

You normally need to register as a sole trader if you earn more than £1,000 in a tax year from self-employed work. This applies to many healthcare roles, including:

Locum doctors or nurses working independently
Private physiotherapists or therapists
Healthcare consultants
Freelance medical writers
Dental professionals working privately
Allied health professionals offering services outside employment

Even if you still work for the NHS or a clinic, you must register as a sole trader if you start earning extra income on the side.

When Should You Register as a Sole Trader?

You do not need to register immediately after your first payment, but HMRC has a deadline. You must register by 5 October following the end of the tax year in which you started trading.

Example:

If you start earning in June 2025, the tax year ends on 5 April 2026. Your registration deadline would be 5 October 2026.

Registering early avoids last-minute pressure and gives you more time to plan your taxes properly.

How To Register as a Sole Trader With HMRC

The actual process of telling HMRC you are starting out is done through a system called Self Assessment. Most people do this online because it is the quickest way to get your Unique Taxpayer Reference (UTR).

Set up your Government Gateway user ID

If you have ever checked your personal tax account or renewed a driving licence online, you might already have one. If not, you’ll need to create one using your email address and some ID like your passport or P60.

Once you are logged in, you tell HMRC that you are starting as a sole trader. They will ask for:

Your full name and address.
Your National Insurance number.
The date you started your healthcare business.
The type of work you do (e.g., “Private Nursing Services”).
Wait for your UTR number

After you register, HMRC will send you a Unique Taxpayer Reference (UTR) in the post. This is a 10-digit number that stays with you for life. Keep it safe because you cannot file a tax return without it.

What Information Do You Need To Register?

Before you register as a sole trader, gather these details:

National Insurance (NI) number
Personal contact details
Business start date
Description of your healthcare work
Business address
Expected income details

Important Deadlines You Cannot Miss

HMRC is strict about dates. If you started working for yourself between 6 April 2025 and 5 April 2026, you must register as a sole trader by 5 October 2026.

Action	Deadline
Registering for Self Assessment	5 October 2026
Filing a paper tax return	31 October 2026
Filing an online tax return	31 January 2027
Paying your final tax bill	31 January 2027

Note: From 6 April 2026, you must use MTD if your qualifying income was over £50,000 in the 2024/25 tax year. For those starting in 2025/26, you will likely be mandated from April 2027 if your income exceeds £30,000.

Do Healthcare Workers Need Extra Registration?

Unlike a plumber or a graphic designer, a healthcare professional often needs to register with a regulator beyond just HMRC. Before you register as a sole trader, you must check if your work involves “regulated activities” (like medical treatments or personal care).

In England, you may need to register with the Care Quality Commission (CQC). However, specific rules apply:

Doctors: Individual GMC-registered doctors working as sole practitioners are often exempt if they see patients only in a physical surgery. However, you must register if you provide remote care (video/phone), surgical procedures, or diagnostic tests.
Dentists: This exemption does not apply to dentists. You must always register with the CQC to provide private dental care.
Nurses: For nurses, the rules are even stricter. There is no “sole practitioner” exemption for nursing, so if you provide clinical treatment independently, you must register with the CQC.

If you are based in Wales, you may need to register with Healthcare Inspectorate Wales (HIW). In Wales, almost all private dental practices and independent clinics must register. If a doctor or dentist works from a fixed location that isn’t an NHS hospital, it is usually classed as an ‘independent clinic’ and requires HIW Registration. Some mobile workers may be exempt, but only if they don’t provide “listed services” like surgery or laser treatments.

Note: Always check the CQC or HIW “Scope of Registration” guidance for your specific profession and legal structure (e.g., if you trade as a Limited Company) to verify if you qualify for an exemption.

Example: A locum GP registering as a sole trader

To bring it to life, imagine a GP who is employed three days a week in the NHS and decides to pick up regular locum shifts at weekends.

The locum shifts bring in more than £1,000 in the year, so they must register as a sole trader.
They register as a sole trader by signing up for Self Assessment with HMRC, giving the date they started locum work and describing the work as locum GP.
Then they report this on their Self Assessment. They must also submit Locum A and B forms to Primary Care Support England (PCSE) if in England, or their Local Health Board if in Wales.

Over time, if the locum and private work grow, they may then look again at whether sole trader status is still the right structure.

What Happens After You Register as a Sole Trader?

Once you have registered as a sole trader, your ongoing responsibilities start. You need to:

Keep proper records of your income and expenses.
File a Self Assessment tax return every year.
Pay income tax and National Insurance on your profits.
Register for VAT if your taxable turnover exceeds £90,000

If you employ reception staff, healthcare assistants or others, you may also have to register as an employer and run PAYE.

What Taxes You’ll Pay as a Sole Trader?

One of the biggest shifts when you move from being an employee to running your own healthcare practice is how you pay the government. When you were employed, you received a payslip with income tax withheld. But once you register as a sole trader with HMRC, you become responsible for determining and paying three primary types of taxes/fees. This includes Income Tax, National Insurance, and Value Added Tax (VAT).

Income Tax

You will receive a Personal Allowance, which is currently £12,570. All of your income below this threshold will be free of tax. Any income over and above the threshold will be taxed as follows: the Basic Rate (20%), Higher Rate (40%), and Additional Rate (45%). If you live in Scotland, the Scottish Income Tax rates will apply.

National Insurance (NI)

When you register as a sole trader, you usually pay Class 4 National Insurance. This is calculated based on your annual profits. The rules changed recently to simplify this, making it cheaper for most self-employed people than it used to be.

Value Added Tax (VAT)

Healthcare Services provided by registered professionals for health protection are generally exempt from VAT. However, if you sell products or provide services that aren’t for health protection, and your turnover hits £90,000, you might need to register.

It is also important to understand HMRC’s “Payment on Account” system. After you register as a sole trader and submit your first tax return, you may have to pay:

Your full tax bill for the previous year
Plus 50% of your estimated next year’s tax bill

This can feel overwhelming if you are not prepared. Many new sole traders are caught off guard by this. Therefore, proper cash flow planning is essential from the beginning.

How To Choose a Name For Your Healthcare Sole Trader Business?

When you decide to register as a sole trader, you have flexibility regarding your professional identity. You can just use your own name, like “Sarah Smith, Podiatrist,” or you can choose a “trading name” like “City Health Solutions.”

If you choose a business name, make sure it:

Doesn’t include “Limited” or “LTD” (since you aren’t a company).
Isn’t offensive.
Doesn’t infringe on someone else’s trademark.

How Much Does It Cost To Register as a Sole Trader?

Registering with HMRC is free. Some people choose professional support to ensure everything is done correctly from the start.

Do I Need to Tell My Current Employer If I Register as a Sole Trader?

If you are still working part-time for the NHS or a private clinic, you should check your employment contract. There may be “non-compete” provisions within your employment agreement which would restrict you from working elsewhere, or you may be required to report any additional income earned.

HMRC allows you to be both. Your only obligation is to report all of your income (from both sources) when filing your tax return.

Can I Be a Sole Trader If I Have Employees?

Yes! The term “Sole Trader” simply indicates that you are the single owner of the business and therefore legally responsible for the business. You can employ as many receptionists, assistants, etc., as you want. However, just remember that if you do decide to hire staff, you will need to establish a PAYE system for their wages and taxes.

Can I Claim My Medical Equipment as an Expense?

Absolutely. As long as they are used “wholly and exclusively” for your work, you can usually deduct the full cost in the first year using the Annual Investment Allowance (AIA).

Can I Register as a Sole Trader If I Already Work Full-Time?

Yes. Many NHS staff and private practitioners run side businesses and choose to register as a sole trader to manage their private work. You simply declare your additional income through Self Assessment alongside employment income.

Should You Be a Sole Trader or Limited Company?

There is no single answer. Many healthcare professionals begin their journey and register as a sole trader because it is simple and cost-effective. As income grows, some switch to a limited company for tax efficiency.

Is Being a Sole Trader Right For Healthcare?

Many healthcare professionals prefer the sole trader route because of privacy. Unlike a limited company, you have no public filing requirements with Companies House when you register as a sole trader.

However, remember that you have unlimited liability. This means if someone sues the business, your personal assets could be at risk. This is why having solid Professional Indemnity Insurance is non-negotiable in the health sector.

Bottom Line

If you are in healthcare and you earn more than £1,000 from self-employed work, you usually need to register as a sole trader with HMRC and start using Self Assessment.

Remember the deadlines, keep good records, and stay on top of your taxes. If you need expert help to register as a sole trader, CruseBurke is here to assist you.

How CruseBurke Can Help

At CruseBurke, we’ve made it our mission to protect the finances of those who spend their lives protecting others. Our team of specialist healthcare accountants understands the complexities of healthcare finances.

If you need help with any accounting service, such as bookkeeping, payroll, or year-end accounts, reach out to us today. We’d love to have a talk about how we can make your life easier and your practice more profitable!

Talk to our best accountants and bookkeepers in the UK at CruseBurke. You will get instant help about who owns a private limited company.

Disclaimer: The information about how to register as a sole trader in the UK provided in this blog includes text and graphics of a general nature. It does not intend to disregard any of the professional advice.

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