Getting your UTR number is a big milestone. It means HMRC has officially recognised you as self-employed, and you’re now responsible for managing your own tax affairs. For many new sole traders, CIS workers, freelancers, and side-income earners, the real confusion starts after the UTR arrives.
Do you need to register for Self Assessment? Can you start claiming expenses? Do you need to join CIS?When do you actually pay tax?
This guide walks you through everything that happens next, step by step including the actions most people forget.
Step 1: Set up your HMRC Personal Tax Account (If You Haven’t Already)
Once your UTR arrives, you’ll usually receive two letters:
- Your 10-digit UTR
- An HMRC activation code for your online account
This code only lasts 28 days, so activate your account as soon as possible.
Your HMRC online account is important because it’s where you’ll:
- View your tax status
- Submit your Self Assessment
- Check deadlines and penalties
- Manage CIS (if you’re in construction)
If you haven’t already registered as a sole trader or self-employed earlier, you can still do this through Tax2u using the Self-Employed registration.
Step 2: You must now keep records of Income & Expenses
After you receive your UTR, HMRC expects you to maintain basic bookkeeping records.
This includes:
- Income (invoices, CIS statements, remittance slips)
- Bank statements
- Receipts for tools, materials, equipment, travel, fuel, PPE
- Business-related subscriptions
- Mileage logs
- Software or online platform fees
You don’t need special software yet, bank statements and clear receipts are fine but keeping clean records now will make your Self Assessment far easier later.
Step 3: If you work in Construction, Register for CIS Immediately
If you’re a subcontractor, labourer, electrician, plumber, or any tradesperson working under the Construction Industry Scheme, you cannot be paid at the reduced 20% rate until you have:
- Your UTR
- Registered under CIS
- Been verified by your contractor
Without CIS registration, contractors must deduct 30% tax, which hurts your cashflow immediately. You can complete CIS registration, this is the fastest way to ensure your contractor can verify you correctly and start paying you under the right tax rate.
Step 4: Start planning for your first Self Assessment Tax Return
Your UTR means HMRC now expects you to submit a Self Assessment tax return every year.
Your tax return will include:
- Your total self-employed income
- CIS deductions (if applicable)
- Business expenses
- Any employment income (PAYE jobs)
- Investment income
- Benefits or additional income streams
Your first filing deadline will be 31 January, following the end of the tax year.
For example:
- If you received your UTR anytime in 2025,
- Your first tax return is due by 31 January 2026.
Step 5: Check whether you’re owed a Tax Refund – most new workers are
Most first-year sole traders and CIS subcontractors overpay tax, because:
- CIS deductions don’t account for expenses
- New sole traders aren’t sure what they can claim
- Mileage and fuel logs get overlooked
- Tools and equipment aren’t claimed
- People pay PAYE + self-employment tax without offsets
Tax2U calculates your refund during your Self Assessment and checks that you’re claiming everything correctly. New CIS workers typically receive £2,000–£3,000+ refunds, depending on expenses. Even non-construction sole traders often receive refunds because of startup costs.
Step 6: Understand your Tax timeline (this is what people miss)
After getting a UTR, many people are surprised to learn HMRC is now expecting:
- A tax return every year, even if your income is low
- Tax payment deadlines on 31 January and sometimes 31 July
- A requirement to keep good financial records
- Possible payments on account (depending on profit)
Tax2u simplifies all of this, we notify you when deadlines are due, help prepare your tax return, and guide you on what you need to send.
Why new Self-Employed workers choose Tax2u
After receiving a UTR, most people feel unsure about what comes next, especially if they’re switching from PAYE or starting a business for the first time.
Tax2U helps by:
- Explaining exactly which steps apply to your situation (CIS, sole trader, freelance)
- Processing your Self Assessment accurately
- Identifying all allowable expenses
- Preventing penalties or missed deadlines
- Helping you claim your refund as soon as the tax year ends
- Making the admin simple so you can focus on work
Many people tell us they wish they’d come to us earlier because the process is far easier with someone checking every detail.
FAQs
- Do I need to send a tax return every year now that I have a UTR?
Yes. Once you’re issued a UTR, HMRC expects an annual Self Assessment, even if you earned very little.
- Can I start working before my UTR arrives?
Yes but CIS workers will be taxed at 30% until your UTR is active and you’re registered.
- Do I need accounting software?
Not at the start. Bank statements and clear receipts are enough. Tax2u will let you know if you need anything more.
- What if I had a UTR years ago?
Tax2u can help retrieve or reactivate an old UTR if needed.
Ready for your next Step After Receiving Your UTR?
Now that your UTR is active, Tax2u can help with everything that comes next from CIS registration to preparing your first tax return and claiming your refund.