Set up and register as self-employed
Arranging to make National Insurance contributions
As well as registering as self-employed you'll need to arrange to pay Class 2 National Insurance contributions (NICs), unless you expect your earnings to be very low - see the later sub-section if this applies to you. For the tax year 2009-10 the Class 2 NICs rate is £2.40 a week.
The most convenient way to pay Class 2 NICs is via direct debit. Paying by Direct Debit has many advantages:
- it's easy to set up - just fill in the application form and send it to HM Revenue & Customs (HMRC) - you will need a suitable account at a bank or building society
- it runs automatically - once set up, you don't have to remember to make payments
- it helps your budgeting - for people in business, good cash flow and budgeting are essential and paying by Direct Debit means that you have to plan for only one month's payment in arrears
- it gives you peace of mind - payments are made on time, every time and there is no risk of losing benefit because you forgot to pay
If you are unable to pay by Direct Debit, HMRC will issue you with quarterly bills in January, April, July and October.
Applying to be exempt from paying Class 2 NICs
If you expect your income from your business to be low for the tax year you may not have to pay Class 2 NICs. To find out more please download form CF10 Self-employed people with small earnings.
You can also find more information in our guide on Class 2 National Insurance contributions.
Subjects covered in this guide
- Introduction
- Before you start
- How and when to register
- Arranging to make National Insurance contributions
- Self-employment status
- Checklist: setting up as self-employed

HMRC Newly Self-Employed Helpline
0845 915 4515
HMRC New Employer Helpline
0845 60 70 143

Actions
- Use our interactive tool to identify the National Insurance contributions you must pay
- Find your local HMRC Business Support Team - Opens in a new window
- Use our interactive tool to get a beginner's guide to tax and accounts rules
- Use our interactive tool to find out which legal structure is right for your business
- Use our interactive tool to find out about the main online transactions you can make with government
- Manage your personal list of starting-up tasks with our Business start-up organiser
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