It is important to let HMRC know that you are self-employed as soon as possible – even if you already fill in a Self Assessment tax return each year. If you don’t tell them, you may have to pay a penalty.

You can let HMRC know about your self-employment by completing the Self Assessment registration forms. HMRC will use the information to set up the right National Insurance records for you too – http://www.hmrc.gov.uk/sa/register.htm

Arranging to pay your Class 2 National Insurance contributions    

As well as registering for Self Assessment you will need to arrange to pay Class 2 National Insurance contributions straight away. You will need to pay £2.50 per week for the 2011-12 tax year.

However if you expect your earnings to be below £5,315 for the 2011-12 tax year, you may not have to pay Class 2 contributions. (See the section  ‘What to do if your earnings will be low’ if you think that this applies to you).

What to do if your earnings will be low

If you expect your income from the business to be low for the tax year you may not have to pay Class 2 National Insurance contributions. You have to apply to be excepted first.

How to register as self-employed – ©Crown Copyright – Contains public sector information licensed under the Open Government Licence v1.0.

Source: http://www.hmrc.gov.uk/selfemployed/register-selfemp.htm