Knockround

Going self-employed as a tradesperson

The six things to sort when you go it alone: HMRC, a name, records, insurance and registrations, your prices, and the tax. In order, with the dates that matter.

By the Knockround team · Published

1. Register with HMRC

You can start work straight away. You must register for Self Assessment as a sole trader once you earn more than £1,000 in a tax year (6 April to 5 April), and you can register before that if you like. Registering gets you a Unique Taxpayer Reference (UTR), which contractors also ask for.

  • The deadline: tell HMRC by 5 October after the end of the tax year you started in. Start in May 2026 (the 2026 to 2027 tax year) and you have until 5 October 2027. Later than that and you could get a penalty.
  • The first return and bill: for a start in 2026 to 2027, the online tax return and the tax are due by 31 January 2028.
  • Working for builders or contractors? Register for the Construction Industry Scheme too, or they'll take 30% from your labour instead of 20%. The CIS calculator shows the difference.

2. Choose a name and look the part

You can trade under your own name or a business name, like "Dave's Plumbing". Put that name and a phone number or email on every quote, invoice and receipt. The free quote, invoice and receipt templates set them out for you.

3. Keep records from the first job

You have to keep records of what you take and what you spend from the day you start, so you can work out your profit for the tax return. Keep them for at least 5 years after the 31 January deadline for that year: sales invoices, receipts for materials and tools, bank statements and mileage.

  • Take payments by card or bank transfer where you can, so each one leaves a record.
  • A separate bank account isn't required for a sole trader, but it keeps the business money in one place.
  • Once your takings are over £20,000 a year, Making Tax Digital means keeping the records in software and sending HMRC an update every three months. See Making Tax Digital for tradespeople.

4. Insurance and registrations

  • Public liability insurance covers you if you damage a customer's property or injure someone. It isn't a legal requirement for a sole trader, but most customers and contractors expect it.
  • Employers' liability insurance is the law as soon as you employ someone (family members aside), for at least £5 million, and you can be fined £2,500 for every day you're not covered.
  • Carrying waste: in England, a business that takes away waste must register as a waste carrier with the Environment Agency, and you can get an unlimited fine if you don't. It's usually free if you only carry waste you produce yourself. Scotland, Wales and Northern Ireland have their own registers.
  • Your trade's own rules: gas work needs Gas Safe registration, and other trades have certificates or schemes customers will ask about. Work with children or vulnerable adults may need a criminal record check.

5. Set your prices

Work out the rate you need before you quote your first job, not after. Your rate has to cover the van, insurance, tools, the weeks you won't work and the tax, not just your wages.

6. Put the tax aside

Unless a contractor takes CIS off your labour, nobody takes tax off your pay any more, so put it aside as the money comes in. Your first January bill can be about one and a half years' worth, because of payments on account. The self-employed tax calculator shows how much to keep back each month, and the mileage calculator what you can claim for the van.

Keep an eye on the £90,000 VAT threshold over any 12 months in a row. The VAT threshold calculator checks it.

Run it from your phone

Knockround is built for tradespeople on their own or with a small team: quotes the customer accepts with a tap, jobs and regular customers on one board, and invoices with a Pay button for Apple Pay, Google Pay or card, so you're paid on the day. The Money screen shows what's paid, what's owed and each month in and out.

Try it on the plumbing demo, with made-up customers. It's free for 7 days with no card needed, then £19.99 a month.

Written by the Knockround team from GOV.UK, read on 29 October 2026: set up as a sole trader, register for Self Assessment, employers' liability insurance and waste carrier registration. This is a guide, not legal or tax advice.

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