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Do Sole Traders Have a Company Registration Number?

We explain the reasons why sole traders aren’t given a Company Registration Number.

Something we’re often asked here at Nixon Williams by those relatively new to self-employment is: “Do sole traders have a Company Registration Number?”

It’s a valid question given that every limited company has its own unique registration number, but one that can leave sole traders confused.

So, getting right to it, do sole traders have a company number? And if not, why not?

In this simple guide, we’ll explain why sole traders aren’t given a Company Registration Number and answer other commonly asked questions on the subject.

What is a Company Registration Number?

We’ll start by explaining what a Company Registration number is. Often referred to as a ‘CRN’, a Company Registration Number is a unique number assigned to an incorporated company.

A CRN is a combination of 8 numbers and in most cases, letters given to one business, which shows that it has been registered with Companies House. This number is permanent and cannot be changed, regardless of whether a company changes its name, activities, directors or even shareholders.

Businesses with a CRN can find it on their certificate of incorporation, along with any official correspondence sent by Companies House. Companies House has a register where you can search for a company by entering its CRN.

When might a CRN be used?

Incorporated businesses will need to use their CRN regularly, including:

  • When registering for tax
  • When filing company accounts and submitting the annual confirmation statement
  • When changing company name, address or ownership
  • When dissolving the company

Why don’t sole traders have a company number?

A sole trader business isn’t incorporated, which means it doesn’t need a company number. Looked at differently, the business isn’t legally separate from its owner, which is why sole traders are often referred to as their business.

In contrast, a limited company is incorporated and has a separate existence from its owners. This is why limited companies need to be registered with Companies House, which is when they will receive a Company Registration Number.

Does it matter that sole traders don’t have a CRN?

It certainly won’t disadvantage you in any way, given it’s effectively just a number used to identify an incorporated company. If you’ve made the decision to operate as a sole trader, not needing to register your business (which is when you’ll receive your CRN) means the start-up process is even simpler.

So how do sole traders register?

Sole traders don’t need to register their business per se. Instead, you just need to register as self-employed for tax purposes, which is how you inform HMRC that you’ll pay Income Tax via the Self-Assessment Tax Return.

Soon after having registered, you’ll receive a Unique Taxpayer Reference (UTR) from the government, which is how HMRC can identify you. Your UTR is a 10 digit code used to identify individual taxpayers and businesses who need to complete tax returns, including those who run their own limited companies.

To learn more about registering as a sole trader, which is one of the first things you’ll need to do when starting out, visit our guide to setting up as a sole trader.

Do sole traders ever need to incorporate their business?

Legally speaking, no. As a sole trader you are under no obligation to form a limited company at any particular stage. There are 3.5m sole trader businesses in the UK, which is a surefire sign that operating this way is a proven way to successfully work for yourself.

That being said, there is a point at which forming a limited company may make sense. So at some stage, going limited might be worth further consideration.

If you’re interested in gaining a better understanding of when you might want to incorporate your business, take a look at our guide to company registration.

Is there anything else to bear in mind?

Whatever support you need as a sole trader – whether it’s advice around answering questions such as ‘what is a CRN?’ or ongoing accounting solutions – our expert and friendly team are on hand to help.

Your next steps

If you are a sole trader and would like to learn more about how we can help you, please take a look at our sole trader accountancy packages.

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