My question is a free classified website classed as a business? Offering a free service but taking no money from advertisers or from adverts.
Do I need to register with HMRC even if I am not taking money?
The question you have to ask yourself is what is your intention for this free site?
Is there an intent to trade?
There is no strict definition on what running a business actually means but HMRC give some advice here:
From what you tell us it is impossible to say if this is a business or what the purpose is of hosting these free adverts. However if you do intent to monetise the site then it is a business and you should register it.
Advice given is for illustration purposes only and should not be relied upon for your tax planning or tax affairs. We recommend that you seek the advice of a suitably qualified accountant before making any tax planning decisions.