Self-employment is how a lot of Europeans first meet the British economy: a freelance contract, a small shop, an online business. Starting is cheap and fast. The hard part, after Brexit, is not the business form. It is whether your immigration status lets you do it.
Here is how being self-employed in the UK works, from the right to work to the tax calendar.
Can you be self-employed in the UK after Brexit?
First, status. With settled or pre-settled status from the EU Settlement Scheme you can work for yourself, as can an Irish citizen. If you arrive now without status, you need a visa that permits the activity. The Innovator Founder visa lets you set up one or more businesses and work in them, and requires a new, innovative business idea endorsed by an approved endorsing body. A Skilled Worker visa lets you do only limited extra work.
GOV.UK sets the Skilled Worker limit at 20 hours a week of work in another job or for your own business, while you keep doing your sponsored job. That extra work must be in a higher-skilled eligible occupation, on the immigration salary list, or in the same sector and at the same level as your main job. Business administration, such as preparing invoices, counts in the 20 hours. So a freelance side project is possible within limits, but a full business is not. Read the Skilled Worker visa guide and the EU Settlement Scheme guide before you spend on a launch.
How do you register as a sole trader?
A sole trader is the simplest form. You do not create a company, you pay no registration fee and you trade under your own name or a trading name.
- Check your right to work, as above.
- Keep records from day one: sales, costs and invoices. They determine your profit.
- Register for Self Assessment with HMRC when your self-employed income passes £1,000 in a tax year, and no later than 5 October after the end of that year. You receive a Unique Taxpayer Reference.
- File online and pay by 31 January after the tax year. If you owe payments on account, the second is due 31 July.
- Watch the VAT threshold of £90,000 (below).
- If your qualifying income from self-employment and property is over £50,000, Making Tax Digital for Income Tax applies to you from April 2026: you keep digital records with compatible software and send quarterly updates, plus the annual return. The threshold drops to £30,000 from April 2027 and £20,000 from April 2028.
You need your National Insurance number to register; see National Insurance number: how to apply.
Torn between sole trader and company, or unsure whether your side project fits your visa? Moovy can compare the two structures for your case, list the registrations and deadlines, and prepare questions for an accountant or an immigration adviser. Moovy does not file anything for you, and the visa question is for a regulated adviser.
What do you pay as a sole trader?
You pay income tax on your profit at the normal bands: 0% to £12,570, then 20%, 40% and 45% in England, Wales and Northern Ireland, with Scottish bands if you live in Scotland. See income tax in the UK for new residents.
For National Insurance, you pay Class 4 contributions on profit: 6% between £12,570 and £50,270 and 2% above, in 2026 to 2027. Class 2 is treated as paid above £7,105 of profit, and below that you may pay £3.65 a week voluntarily to protect your pension record. You must also register for VAT within 30 days of the end of the month in which your last 12 months' turnover passes £90,000. VAT rates are 20%, with 5% and 0% for some goods; you can register earlier voluntarily.
A common first-year shock is the double payment: in January you can owe the tax of the year just ended plus the first payment on account for the next, so save a share of every invoice.
When does a limited company make sense?
A private limited company is a separate legal person. You pay for it, you file more paperwork, and your personal assets are protected. Registration online costs £100 and is usually done within 24 hours; by post it is £124 and takes 8 to 10 days. You need at least one director and one shareholder, who may be the same person. A director must be at least 16 but does not need to live in the UK; only the registered office must be here.
Since 18 November 2025, every director must verify their identity with Companies House, free through GOV.UK One Login or with an authorised agent. Then you provide the company name, registered office, SIC code, directors, shareholders, people with significant control and the articles. Never send identity documents by post or email to Companies House.
Corporation tax is 19% on profits up to £50,000 and 25% above £250,000, with marginal relief between. Each year you file accounts, a company tax return and a confirmation statement (£50 online). First accounts are usually due 21 months after registration, then 9 months after the end of each accounting period. Late filing brings automatic penalties, starting at £150 for accounts and £200 for company tax returns.
Creating a company gives you no right to live or work in the UK. You still need a status or visa, and you pay yourself by salary or dividends, each taxed differently: £500 of dividends are tax-free, then 10.75%, 35.75% or 39.35% by band in 2026 to 2027. Employer National Insurance is 15% above £5,000.
How do you choose between the two forms?
Ask four questions. How much risk can you carry? A sole trader answers personally for business debts, while a company separates the two. How much paperwork can you handle? A sole trader files one annual return, and a company files accounts, a company tax return and a confirmation statement. How much profit do you expect? Small, early profits are often simpler as a sole trader, and a company's flexibility on salary and dividends matters more later. And how do clients see you? Some corporate clients prefer to contract with a company.
There is no universal answer, and the best choice can change after a year. Moving from sole trader to company is common, and an accountant can tell you when the numbers justify it. Before you decide, have a UK accountant or tax adviser check your own figures; ask for a fixed quote and be wary of anyone promising a "tax-free" structure.
What about invoices, insurance and a business account?
Even a small freelancer should issue proper invoices with a number, date, your name and address, the client's details, a description and the amount, and VAT if you are registered. Keep copies for the period HMRC requires. Consider professional indemnity or public liability insurance if your clients ask for it, and sort out your own pension and sickness cover, since a self-employed person has no employer paying Statutory Sick Pay.
A separate business account keeps your personal and business money apart and makes the annual return far easier. Ask your bank whether a basic account may be used for trading; our guide on opening a bank account explains the options.
What should you do about social security in your home country?
If you keep working in two countries, rules on social security coordination decide where you contribute: generally one country at a time. A certificate of coverage (PDA1, equivalent to the A1) issued by your home country can keep you in its system when you work temporarily in the UK for up to two years, or in several countries at once. Without it, you may owe UK National Insurance and have a contribution gap at home. Check with your home social security body before you leave.
Also avoid keeping a registration in your country of origin while invoicing from the UK without advice. It can lead to double returns and contributions paid in the wrong place.
What are the usual mistakes of the self-employed in the UK?
- Starting before your status allows it. This risks your visa and future applications.
- Forgetting payments on account. Budget for the January and July payments.
- Missing VAT. Watch your rolling 12-month turnover.
- Confusing company money and your money. Use a separate business account; see bank account in the UK.
- Not saving for tax. Set aside a share of every payment.