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First 90 Days Self-Employed Checklist

A printable checklist covering the first 90 days of self-employment in the UK. Week 1: register with HMRC (CWF1), open a business bank account, start an income and expense log. Weeks 2 to 4: learn your 3 core tax obligations, set up a tax reserve pot (25 to 30 percent of every payment), learn the key deadlines. Month 2: upgrade bookkeeping, start tracking mileage at the AMAP 45p per mile rate for the first 10,000 miles, decide on a home-office claim method. Month 3: understand payments on account, decide whether to engage an accountant, learn the £1,000 trading allowance.

Last reviewed: 26 May 2026

Guidance, not advice. We explain the rules, we don't assess your situation. Always seek financial or tax advice from your accountant, or contact HMRC. Read our editorial scope →

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TAXKILN — FIRST 90 DAYS SELF-EMPLOYED CHECKLIST

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  WEEK 1 — FOUNDATIONS
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  [ ] 1. Register with HMRC as self-employed (form CWF1)
  Why: Triggers your UTR (10-digit reference) and National Insurance Class 2/4 enrolment. Takes ~10 working days.
  Skip cost: You miss the 5 October deadline after your first tax year → failure-to-notify penalty under Sch 41 FA 2008 even if no tax owed.

  [ ] 2. Open a separate business bank account
  Why: Clean separation of business and personal money is essential for HMRC enquiries, accountant fees, and your own sanity.
  Skip cost: At year-end you'll spend 3+ hours per month untangling transactions. Worse, if HMRC opens an enquiry you have no clean audit trail.
  Tip: A free 'sole trader' current account is fine — you don't need an expensive 'business' account.

  [ ] 3. Start an income and expense log
  Why: From day one, log every penny in and every penny out. A spreadsheet is fine.
  Skip cost: You lose deductible expenses you forgot about — typically £500 to £2,000 of tax per year for a typical sole trader.
  Minimum columns: Date | Description | Category | Amount | VAT | Notes.

  [ ] 4. Read your basic tax obligations (10 minutes)
  Why: Three things you owe: (a) Income Tax on profit (20%, 40% or 45%), (b) Class 4 NI (6% / 2% on profit), (c) Class 2 NI (now treated as paid if profit > £6,725; £3.45/week voluntary below).
  Skip cost: You under-reserve and panic in January.

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  WEEKS 2 to 4 — SYSTEMS
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  [ ] 5. Open a 'TAX' savings account, transfer 25 to 30% of every payment
  Why: Standard-rate trader on £40K profit owes c. £6,500 IT + £2,400 NI = ~22% effective. Higher-rate or first-year POA shocks need closer to 30%. Reserve high; never reserve low.
  Skip cost: Doubled January bill (return + balancing payment + first POA) crashes into an empty account.

  [ ] 6. Memorise the key deadlines
  Why: 5 October = register; 31 October = paper return; 31 January = online return + balancing payment + POA1; 31 July = POA2; 6 July = P11D (only if you employ); VAT = monthly+7 days quarterly.
  Skip cost: £100 penalty + daily £10 + 5% surcharges + interest.

  [ ] 7. Choose bookkeeping software (or commit to spreadsheets)
  Why: From April 2026 (Making Tax Digital for Income Tax) sole traders earning over £50K must use compatible software for quarterly updates. £30K threshold from April 2027.
  Skip cost: Last-minute software migration in March 2026. Pick now, learn over the year.

  [ ] 8. File your first invoice properly
  Why: Must include your name (or trading name), customer name, date, description, amount; VAT number if VAT-registered. Number invoices sequentially.
  Skip cost: Client disputes and slow payment.

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  MONTH 2 — OPERATIONAL DETAILS
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  [ ] 9. Start a mileage log (digital or notebook)
  Why: AMAP rate (Approved Mileage Allowance Payments) is 45p per mile for the first 10,000 business miles, 25p thereafter. On 5,000 business miles per year that's £2,250 deductible.
  Skip cost: Without contemporaneous logs HMRC will disallow the deduction in an enquiry.
  What counts: Travel to clients, suppliers, training, banks. NOT commuting to a regular base.

  [ ] 10. Decide your home-office claim method
  Why: Two options. (a) HMRC's simplified flat rate (£10/m for 25 to 50 hrs, £18/m for 51 to 100, £26/m for 101+). (b) Actual costs apportioned by rooms × time. Method (b) usually wins for full-time WFH but requires records.
  Skip cost: Most new sole traders forget this entirely and lose £120 to £700/year of deduction.

  [ ] 11. Upgrade your insurance
  Why: Professional Indemnity (PI) if you give advice, Public Liability if clients visit you, employers' liability if you hire anyone (legally required). Often £100 to £400/year.
  Skip cost: One claim wipes out your business.

  [ ] 12. Decide on VAT registration
  Why: Mandatory if your rolling 12-month turnover exceeds £90,000 (2025/26). Voluntary registration below that has trade-offs — see TaxKiln voluntary VAT guide.
  Skip cost: Late mandatory registration = backdated VAT bill you can't recover from clients.

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  MONTH 3 — STRATEGIC SETUP
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  [ ] 13. Understand Payments on Account (THE big cash-flow shock)
  Why: If your tax bill exceeds £1,000 and less than 80% was deducted at source, you pay (a) the balancing payment for last year AND (b) 50% on account for current year — both on 31 January, then another 50% on 31 July.
  Skip cost: First-year sole traders see their tax bill effectively 1.5x in January and panic. Plan for it now.

  [ ] 14. Decide on an accountant
  Why: For a clean SA: DIY is free, software is £30 to £100/year, accountant is £200 to £500 for a straightforward sole trader. Above £80K turnover or with rental/CGT/foreign income, an accountant typically saves more than they cost.
  Skip cost: Either overpaying tax (DIY without knowledge) or overpaying fees (accountant for a simple position). Make a deliberate choice.
  Find one: ICAEW, ACCA, ATT, CIOT directories. Avoid unqualified bookkeepers calling themselves "tax advisors".

  [ ] 15. Learn the £1,000 Trading Allowance (and don't accidentally lose it)
  Why: If gross trading income ≤ £1,000, no need to declare or register. Above that, you can either (a) deduct actual expenses, or (b) deduct the £1,000 flat allowance instead — choose whichever is higher. You cannot do both.
  Skip cost: Side-hustlers with low expenses often forget the flat allowance and overpay tax by £200 to £400.

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  APPENDIX — QUICK Q&A
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  Q: Do I need to register if I made < £1,000?
  A: No, the Trading Allowance exempts you from registration. But if you want to pay voluntary Class 2 NI for State Pension qualifying years, you can opt to register anyway.

  Q: When do I switch to a Ltd company?
  A: Generally when profit consistently exceeds £30K to £50K AND you'd reinvest a meaningful portion. Below that, the corporation tax + dividend setup usually costs more in admin than it saves. See TaxKiln "Should I go Ltd?" guide.

  Q: I haven't started invoicing yet — can I still claim pre-trading expenses?
  A: Yes. Expenses incurred up to 7 years before trading begins can be deducted in the first accounting period, provided they would have been allowable had the business been trading at the time (ITTOIA 2005 s.57).

  Q: What if I'm employed AND self-employed?
  A: Both incomes get reported on the SA return. PAYE tax already paid is credited; you only pay extra on the additional band the self-employment pushes you into. See TaxKiln "Side hustle and job" guide.

  For the full editorial walkthrough, see TaxKiln /guides/first-90-days-self-employed.

Last reviewed: 26 May 2026