When registering for Self Assessment as a sole trader, HMRC will ask you to provide the date your business began trading.
Your business start date affects your registration deadline, National Insurance contributions, and the tax year in which your income must be reported.
HMRC expects you to declare a date that reflects when your business became operational – not when you began preparing for it.
This guide sets out HMRC’s interpretation of “commencement of trade,” explains what does and does not count, and offers practical examples to help you determine the correct date.
The official HMRC view: when does trade begin?
HMRC’s Business Income Manual states:
“The question as to whether a trade has commenced is one of fact and depends upon the nature of the trade or profession in question. Generally, a trade commences when the trader is in a position to provide those goods or services which it is the purpose of the trade to provide.”
In other words, your start date is the point at which your business is ready and available to serve customers – not when you’re planning, researching, or acquiring assets.
You don’t need to have made a sale or received payment, but there must be evidence that you were actively open for business and capable of fulfilling orders or carrying out work.
Examples that may constitute a valid start date
| Activity | Does it count? | Reason |
|---|---|---|
| You delivered a service to a paying customer | ✓ | Trade has begun through commercial activity |
| You listed products for sale online (e.g. Etsy or eBay) | ✓ | You’re actively holding out goods for sale |
| You publicly advertised your services (e.g. flyer drop, online ad) | ✓ | You are offering services to the market |
| You accepted a client booking or contract | ✓ | There is an obligation to perform work in return for payment |
You delivered a service to a paying customer
Does it count? ✓
Trade has begun through commercial activity
You listed products for sale online (e.g. Etsy or eBay)
Does it count? ✓
You’re actively holding out goods for sale
You publicly advertised your services (e.g. flyer drop, online ad)
Does it count? ✓
You are offering services to the market
You accepted a client booking or contract
Does it count? ✓
There is an obligation to perform work in return for payment
Activities that do not indicate the start of trade
| Activity | Does it count? | Reason |
|---|---|---|
| You purchased tools, stock, or equipment | ✗ | This is preparatory expenditure |
| You registered a business name or domain | ✗ | Administrative step, not evidence of trading |
| You built a website that is not yet published | ✗ | No goods or services are available to the public |
| You attended networking events or client meetings | ✗ | No actual services provided or advertised |
You purchased tools, stock, or equipment
Does it count? ✗
This is preparatory expenditure
You registered a business name or domain
Does it count? ✗
Administrative step, not evidence of trading
You built a website that is not yet published
Does it count? ✗
No goods or services are available to the public
You attended networking events or client meetings
Does it count? ✗
No actual services provided or advertised
Why your start date matters
Your business start date affects several important tax obligations:
- Self Assessment registration: You must register with HMRC by 5 October following the end of the tax year in which you started trading. See: How to register as self-employed
- Late registration penalties: Delaying registration can result in fines. If you’ve missed the deadline, read: What happens if you register late?
- Class 2 NICs: These typically begin from your start date unless you qualify for exemption
- Trading allowance: The £1,000 allowance applies per tax year — your start date determines which year it falls into
What if you stop and restart?
If you temporarily cease trading but intend to continue (e.g. a seasonal pause or gap between clients), your business is usually treated as continuing.
However, if you permanently stop and later resume trading, you may be required to register again. HMRC may consider the resumed activity to be a new business.
This matters for:
- Tax year alignment and reporting obligations
- Eligibility for new business schemes or reliefs
- Restarting Class 2 NIC contributions
Recordkeeping and evidence
Although HMRC does not require you to provide formal proof of your start date when registering, it’s advisable to keep a record in case of future queries.
Helpful documents may include:
- Your first invoice or receipt
- Bank transaction showing receipt of business income
- A dated advertisement or product listing
- Any signed contract or booking confirmation
Final notes
You should select a start date that accurately reflects when your business began trading in a meaningful, outward-facing way.
If you’re unsure, err on the side of caution – but avoid setting a date so early that it includes pre-trade expenditure, or so late that it contradicts your records.
For more detail on how HMRC determines commencement of trade, see:
HMRC Business Income Manual – BIM80505
If you’re starting a limited company
If you’ve registered a limited company with Companies House, the date on your certificate of incorporation is not necessarily the date your business starts trading.
Just like with sole traders, HMRC considers a company to have started when it begins commercial activity – for example, issuing invoices, signing contracts, or actively offering services.
You’ll need to notify HMRC when your company becomes active so they can issue the correct Corporation Tax filing dates. Until then, it can be considered dormant.
If you’re going limited rather than becoming a sole trader, visit our limited company section.
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