Last Updated on January 27, 2026 by Joy Kyalo
The most common question new entrepreneurs ask when starting a business in the UK is: Do I need a company registration number as a sole trader? It is a great question, and it is crucial to understand how business registration works in the UK to avoid unnecessary formalities.
In this article, we will highlight the differences between limited companies and sole traders, the purpose of Company Registration Numbers (CRN), and whether sole traders need them. We will also examine the types of identification numbers sole traders use, how taxes are paid, and what to do in case you decide to establish a company later.
Key Takeaways
- Sole traders do not have a Company Registration Number (CRN) because they are not incorporated.
- Instead of a CRN, sole traders use identifiers like a UTR, NI number, and VAT number (if registered).
- Limited companies need a CRN because they are a separate legal entity from their owners.
- A sole trader only gets a CRN if they later incorporate as a limited company.
What Is a Company Registration Number (CRN)?
When a business is incorporated, a unique identifier number issued by the Companies House, the registrar of companies in the UK, is called a Company Registration Number (CRN).
This is issued after registering your business as either:
- Private Limited Company (Ltd)
- Public Limited Company (PLC)
- Limited Liability Partnership (LLP)
Any official communication or record of your business identifies your business by your CRN. It will appear on such documents as:
- Certificate of Incorporation
- Confirmation Statements
- Corporation Tax returns
- Invoices and legal contracts
An example of a CRN would be: “12345678” (when a company is registered in England and Wales) or would begin with letters like: SC (when located in Scotland) or NI (when located in Northern Ireland).
Do sole traders have a Company Registration Number?
The quick version of the answer is no – sole traders do not possess company registration numbers since they are not incorporated entities.
Working as a sole trader, you are the same as your business. This is because, as opposed to a limited company, your business does not exist on Companies House. Rather, you register with the HM Revenue and Customs (HMRC) to be taxed.
However, that doesn’t mean you’re unregistered. You still have certain responsibilities and identifiers to operate legally and we’ll explore those next.
What identification numbers do sole traders have instead?
Although sole traders are not assigned with CRN, they are assigned other formal identities related to tax and business registration. These include:
Unique Taxpayer Reference (UTR) number:
By registering as a sole trader with HMRC, you will be issued with a Unique Taxpayer Reference (UTR) number.
This is a ten-digit number that identifies you when filing a Self-Assessment. Your UTR will be used to make tax filings and communicate with HMRC.
National Insurance Number (NI):
Being a self-employed person, your National Insurance (NI) number is associated with your tax and contributions history.
You will need this for the payment of Class 2 and Class 4 National Insurance on your Self-Assessment.
VAT Registration Number (if applicable):
In case you have an annual turnover of more than 90,000, you are required to be registered for Value Added Tax (VAT).
Upon registration, a VAT number will be assigned that should be presented on invoices and receipts.
Why limited companies need a CRN
The primary reason why small businesses are assigned a CRN is that they are a separate legal entity from the owners or directors.
The company can own property, contract, and either be sued or sue, at its own risk. It is this legal separation that provides company directors with limited protection of liability.
Sole traders, on the other hand, are personally liable for the finances and debts of the business. Since it is not legally necessary to distinguish between the business and the individual, a CRN is not required.
How to register as a sole trader
Setting up as a sole trader in the UK is quick, simple, and free. Here’s how:
- Choose a business name – You can trade under your own name or create a business name (just ensure it isn’t misleading or already trademarked).
- Register with HMRC – Visit the [GOV.UK Self-Assessment registration page] (https://www.gov.uk/set-up-sole-trader) to register as a sole trader.
- Keep financial records – Track all income, expenses, and receipts for your tax return.
- Submit your Self-Assessment – File your tax return by 31 January each year for the previous tax year.
- Pay your taxes and National Insurance – Based on your profit, you’ll pay income tax and Class 2/4 NI contributions.
When a sole trader might need a CRN
Although sole traders don’t have a company registration number, there are cases where you might want one and that means forming a limited company.
You may consider incorporation if you want to:
- Protect your personal assets through limited liability
- Enhance your business credibility with clients or investors
- Separate business and personal finances
- Access better funding opportunities
- Use a registered business name exclusively
When you register your business as a limited company, Companies House will automatically issue a Company Registration Number (CRN) as part of your incorporation certificate.
To summarise, sole traders do not need a Company Registration Number since they are not a legal business structure registered by Companies House. Unless a sole trader decides to incorporate a limited company, they will not need a CRN for any of their day-to-day operations.
To transform from a sole trader to a private limited company, BusinAssist will make this process seamless and easy. With our UK limited company incorporation service, sole traders can incorporate their company by sending all the business information needed on our website.
Our user-friendly website will make it easy for you to navigate and input all the details required. Visit our website,https://businassist.com/, or contact us at info@businassist.com.
FAQs
Q: Do sole traders need to register with Companies House?
Ans: Sole traders do not need to register with Companies House, but they must register with HMRC for self-assessment taxes.
Q: What number do sole traders use for tax purposes?
Ans: Sole traders in the UK use a Unique Taxpayer Reference (UTR) number for tax purposes. The 10-digit number is issued by HMRC once a sole trader registers for self-assessment.
Q: Can a sole trader get a company registration number if needed?
Ans: A sole trader cannot get a company registration number since it is not a legal company structure. A company receives a company registration number after registration with Companies House.
Q: Do sole traders need a UTR or VAT number?
Ans: A UTR number is mandatory for sole traders as it will be needed to file self-assessment taxes. However, a VAT number is not mandatory for all sole traders since it is only needed if your business turnover exceeds the registration threshold, which is £90,000.
Q: Can a sole trader open a business bank account without a company registration number?
Ans: Yes, a sole trader can open a business bank account in the UK without a company registration number, because they are not a legally separate entity from their business and don’t register with Companies House. Instead of a registration number, they will need to provide other documents such as proof of ID, a UK business address, and personal details.
Q: Can sole traders operate legally without a registration number?
Ans: Yes, a sole trader can operate legally without a registration number since it is not a legal company structure registered with Companies House. This is a company structure that does not need a registration number.
Read Also:
- When is the Right Time to Change from Sole Trader to Limited Company?
- Difference Between a Sole Trader and a Limited Company Explained
- Companies House Fee Increase – February 2026: What UK Startups Need to Know
- Best Virtual Phone Number Providers in the UK: Top Choices for 2026
- Easy Businesses to Start in the UK in 2026: Profitable Ideas for Aspiring Entrepreneurs
- 50 Small Business Ideas to Start in 2026: Low Investment and High Potential
- How Many Bank Holidays Are There in 2026? Full UK List by Region
Joy is a content writer at BusinAssist with 6+ years of experience in content marketing and social media strategy. She specialises in company formation and virtual operations, guiding entrepreneurs through global markets with clarity, drawing on her marketing and PR background. Business Assist with BusinAssist – your business success partner.