This guide is for internationals who have recently moved to the United Kingdom and want to work for themselves as a sole trader. After reading it, you will be able to tell whether you are trading, know when registering with HM Revenue and Customs (HMRC) becomes compulsory, and understand which records to keep and which taxes may apply.
- Are you trading?
- What being a sole trader means
- Registering with HMRC
- Keeping records from day one
- What you pay
- Licences, premises and staff
- FAQ
Are you trading?
Before you register for anything, you need to know whether you are running a business at all. GOV.UK’s guide to working for yourself says you need to set up a business if you trade in goods or services. You are likely to be trading if you sell regularly to make a profit, make items to sell for profit, sell items on a regular basis online, at car boot sales or through classified adverts, earn commission from selling goods for other people, or are paid for a service you provide.
The same page also lists signs that you are probably running a business. These include taking responsibility for its success or failure, having several customers at the same time, deciding how, where and when you work, being able to hire help at your own expense, providing the main equipment, putting right unsatisfactory work in your own time and charging an agreed fixed price.
Occasional selling is treated differently. If you only sell items now and then, or rent out property through auction websites or short-term rental apps, GOV.UK says to check whether HMRC needs to know about that income. If it is unclear whether an activity counts as trading, the page says to contact HMRC for advice.
What being a sole trader means
GOV.UK’s guide to setting up as a sole trader describes it as the simplest business structure to set up and keep records for. You work for yourself, you are classed as self-employed and you make all the business decisions. Most people start out this way, though other structures exist.
Being a sole trader can be your only job, or you can be employed and self-employed at the same time. GOV.UK gives the example of someone who works for an employer during the day and runs a business in the evenings.
The trade-off is liability. Sole traders have unlimited liability, which means the owner is personally responsible for all the debts of the business. If something goes wrong, there is less protection, although business insurance may offer more. In return, you keep all the profits after paying tax.
GOV.UK says you should choose a business name as soon as you start working for yourself. It can be a trading name or your own name, and there are separate rules on naming a business.
Neither page covers whether your immigration permission allows self-employment. Questions about your own immigration status are for a regulated adviser registered with the OISC or a solicitor regulated by the SRA.
Registering with HMRC
You can start trading straight away without registering. Registration is triggered by income: you must register for Self Assessment as a sole trader if you earn more than £1,000 in a tax year, which runs from 6 April to 5 April. You can choose to register earlier, and once registered you will need to submit Self Assessment tax returns.
The two official pages used for this guide do not give the deadline for registering, the deadline for filing a return or the documents HMRC asks for. GOV.UK’s step-by-step guide links to a separate page on how to register, and that is where those details are published.
Keeping records from day one
You must keep records from the day you start trading, not from the day you register. GOV.UK says these records help you work out your profit or loss for your Self Assessment tax return.
The pages here do not list exactly which records are required or how long to keep them. Step 3 of the GOV.UK sole trader guide points to a separate page on the business records you need.
Records also support expense claims. GOV.UK explains that you can check whether office, property and equipment costs count as expenses, and it points sole traders to tax reliefs that can reduce a tax bill.
What you pay
You do not work out your Income Tax and National Insurance yourself. When you submit your Self Assessment return, HMRC works out whether you need to pay them, based on your profits. GOV.UK offers an estimate of how much you will need to pay and has pages on Income Tax and National Insurance rates. The rates themselves do not appear on the pages used here.
VAT works differently. You need to register for VAT if you meet the requirements, but the sole trader page does not give the threshold, so the current figure has to be confirmed on GOV.UK’s VAT pages. You can also choose to register before you meet the requirements if you want to reclaim VAT on business expenses.
Other taxes may apply depending on what you do. Step 5 of the GOV.UK guide is a check of which taxes may apply to sole traders, and step 6 covers planning for your tax bill.
Licences, premises and staff
Some businesses have extra responsibilities. GOV.UK says you may need business insurance, or licences or permits, for example to play music, sell food or trade in the street. Further rules apply if you sell goods online, buy goods from abroad, sell goods abroad, or store or use personal information.
If you work with protected groups, such as children or vulnerable adults, you may need a criminal record check. The process is different in each nation, with separate routes for England and Wales, for Scotland and for Northern Ireland.
Where you work matters too. There are responsibilities for running a business from home and for renting premises. If you rent or buy a property, you may have to pay business rates. Small businesses can apply for a discount and some pay nothing, but the pages here do not say who qualifies.
Taking on employees means running payroll, paying their National Insurance (you can claim an allowance to reduce this bill) and providing workplace pensions to eligible staff. If you use agency workers or freelancers, you also have some responsibilities, for example for their health and safety.
FAQ
Do I need to register before my first sale?
No. GOV.UK says you can start trading straight away without registering. You must register for Self Assessment as a sole trader if you earn more than £1,000 in a tax year, which runs from 6 April to 5 April, and you can choose to register earlier.
Can I have a job and be a sole trader at the same time?
Yes. GOV.UK confirms that you can be employed and self-employed at the same time, for example working for an employer during the day and running your own business in the evenings.
Am I personally liable for business debts?
Yes. Sole trader businesses have unlimited liability, so the owner is personally responsible for all the debts of the business. GOV.UK notes that business insurance may give more protection.
Does my visa allow me to work as a sole trader?
The GOV.UK pages on setting up as a sole trader and working for yourself do not cover immigration permission. Questions about your own status are for a regulated immigration adviser registered with the OISC or a solicitor regulated by the SRA.
Official sources: gov.uk · gov.uk
Last verified: 26 October 2026 against the official pages linked above. Rules and fees change; the official page always wins.
This is general information, not legal or immigration advice. Immigration advice in the UK may only be given by advisers regulated by the OISC or by solicitors regulated by the SRA.
Sources
- gov.uk: Become a sole trader, accessed 26 October 2026
- gov.uk: Working for yourself, accessed 26 October 2026
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