How Much Tax Do You Pay as Self-Employed in the UK? (2025–26)
Being self-employed in the UK means paying Income Tax and National Insurance on your profits — not your gross income. Here's exactly how it's calculated, and a free tool to do the maths for you.
Free Tax Calculator — 2025–26
Enter your income and expenses. Get your Income Tax, Class 4 NI, effective rate and monthly set-aside amount instantly.
What taxes do self-employed people pay in the UK?
As a sole trader or freelancer in the UK, you pay two types of tax on your profits:
- Income Tax — based on your taxable profit after the Personal Allowance
- Class 4 National Insurance (NI) — an additional charge on profits above the Lower Profits Limit
You do not pay these as you earn — you report them on a Self Assessment tax return, due by 31 January each year. This means you must set money aside throughout the year.
2025–26 tax rates and thresholds
| Band | Income | Income Tax Rate |
|---|---|---|
| Personal Allowance | £0 – £12,570 | 0% |
| Basic rate | £12,571 – £50,270 | 20% |
| Higher rate | £50,271 – £125,140 | 40% |
| Additional rate | Over £125,140 | 45% |
Class 4 NI: 6% on profits between £12,570 and £50,270, then 2% above £50,270.
Worked example: profit of £30,000
What is Payment on Account?
If your tax bill exceeds £1,000, HMRC requires you to make advance payments toward next year's bill — called Payments on Account. Each payment is 50% of your current year's bill. This means your first January payment can be 150% of what you expected.
Our calculator warns you when this applies and shows the full January amount including the advance payment.
What expenses can you deduct?
You only pay tax on your profit, not your gross income. Allowable expenses reduce your taxable profit and therefore your tax bill. Common deductions include:
- Business mileage (45p per mile for the first 10,000 miles)
- Home office (£6/week flat rate, or actual proportion)
- Phone and internet (business proportion)
- Software subscriptions and tools
- Professional fees (accountant, insurance)
- Training directly related to your work
Calculate your exact tax bill
Enter your income and expenses — get your Income Tax, NI, effective rate and monthly set-aside in seconds. Free, no signup.
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