IDof you start earning money for yourself, one of the first questions that often comes up is: do I need to register with HM Revenue and Customs (HMRC)?
The answer depends on what you’re doing and how much you’re earning.
If you are regularly selling goods or providing a service with the intention of making money, you are usually classed as a sole trader. This means you are self-employed, even if it’s something small or part-time alongside other income.
However, you don’t always need to register straight away.
The £1,000 Trading Allowance
HMRC has a £1,000 trading allowance. This means you can earn up to £1,000 in a tax year from self-employment without needing to register or submit a tax return.
This £1,000 is based on your gross income, which is the total amount you receive before taking off any costs or expenses.
If your total income from selling or services stays at £1,000 or below, and you are not already registered for self-assessment, you don’t need to inform HMRC.
When You Do Need to Register
Once your gross income goes over £1,000 in a tax year, you will need to register as self-employed and complete a self-assessment tax return.
You must register by 5 October in your second tax year of trading.
For example, if you started earning in June 2025, you would need to register by 5 October 2026.
What Doesn’t Count as Trading
Not everything counts as running a business.
If you are:
- Selling unwanted personal items occasionally (for example on eBay or Vinted)
- Running a blog or social account that isn’t making money
then you are unlikely to be classed as trading, and you won’t need to register.
The key difference is intent. If you are buying or creating things to sell for profit, that’s trading. If you’re just clearing out your own belongings, it usually isn’t.
Keeping Records
Even if you are earning under £1,000, it’s important to keep clear records of what you make.
This helps you:
- Stay organised
- See when you’re getting close to the threshold
- Provide proof if HMRC ever asks
Simple records like a spreadsheet or a notebook are fine to start with.
Using Accounting Software
As things grow, it can be helpful to use accounting software to track your income and expenses properly.
I personally use FreeAgent, which helps me keep everything in one place and makes it easier to see my profit or loss.
Still Not Sure?
If you’re unsure whether what you’re doing counts as trading, you can check directly with HMRC or use the guidance on their website.
It’s always better to check early than to worry later.
I’m not an accountant, but I’ve been self-employed online for a number of years, so this is based on my own experience.
If you have questions, feel free to leave a comment and I’ll do my best to help point you in the right direction.
