UK Self-Employed Tax Calculator

A sole trader pays Income Tax and Class 4 National Insurance on their taxable profit. For 2025/26, Income Tax is 20% on income between £12,570 and £50,270, 40% to £125,140 and 45% above, after the £12,570 personal allowance. Class 4 NIC is 6% on profit between £12,570 and £50,270 and 2% above. This calculator combines both.

Class 4 National Insurance is 6% on self-employment profit between the lower profits limit of £12,570 and the upper profits limit of £50,270, and 2% on profit above £50,270. The main rate was cut from 9% to 6% from 6 April 2024, so self-employed NIC is lower than in previous years.

For most self-employed people, no. From 6 April 2024 Class 2 National Insurance is no longer required for those with profits above the lower profits limit (£12,570) — they are treated as having paid and still build entitlement to the State Pension. If your profits are below the small profits threshold (£7,105 for 2025/26) you can pay voluntary Class 2 at £3.65 a week to protect your record.

The £12,570 personal allowance applies to the self-employed in the same way as employees — the first £12,570 of your total income is tax-free. It is reduced by £1 for every £2 of income over £100,000 and is lost entirely at £125,140. This calculator applies the taper automatically, which matters for higher-earning sole traders.

Your taxable profit is your business income minus allowable business expenses — costs incurred wholly and exclusively for the business, such as stock, equipment, travel and a proportion of home-office costs. You may also be able to use the trading allowance or capital allowances. Enter your profit after expenses; the calculator then applies tax and NIC to it.

For the 2025/26 tax year, the online Self Assessment return and the balancing payment are due by 31 January 2027. You may also have to make 'payments on account' — advance instalments towards the next year — due on 31 January and 31 July. Missing deadlines triggers automatic penalties and interest, so register and file in good time.

Payments on account are advance payments towards your next tax bill, each equal to half of your previous year's tax and Class 4 NIC. They are due on 31 January and 31 July. This can mean your first year as a sole trader brings a larger-than-expected January bill — the balancing payment plus the first payment on account — so it is worth planning for.

Yes. As a sole trader you pay both Income Tax and Class 4 National Insurance on your profit, which is why your effective rate is higher than income tax alone. This calculator shows the two separately and combined, so you can see your true total cost on each pound of profit.

Other income such as a salary uses up your personal allowance and lower tax bands first, so your self-employment profit is taxed on top — potentially pushing it into a higher band. Enter your other income and the calculator stacks your profit above it for the Income Tax bands, while Class 4 NIC is still charged on the profit itself.

It depends on your profit level and circumstances. Sole traders pay Income Tax and Class 4 NIC on profit; a limited company pays Corporation Tax, and you then extract income as salary and dividends, which can be more tax-efficient at higher profits but adds admin and filing. This calculator covers the sole-trader position; compare it with a company structure before deciding.

You can deduct costs incurred wholly and exclusively for your business — office costs, travel, stock, professional fees, a proportion of home and phone costs, and equipment (often via capital allowances or the annual investment allowance). Keeping thorough records of allowable expenses directly reduces your taxable profit and therefore your bill.

The trading allowance lets you earn up to £1,000 of self-employment or casual income tax-free each year without reporting it. If your income is above £1,000 you can either deduct your actual expenses or claim the £1,000 allowance instead of expenses, whichever is better. This calculator assumes you have entered your profit after whichever method you use.

Class 4 National Insurance is UK-wide and the same in Scotland, but Scotland sets its own Income Tax rates and bands, which differ from the rest of the UK. This calculator uses the England, Wales and Northern Ireland Income Tax bands, so Scottish taxpayers should treat the Income Tax figure as indicative and check the Scottish rates.

You pay HMRC directly after filing your return — by bank transfer, debit card, or other accepted methods — by the 31 January deadline. You cannot generally spread the cost through your tax code unless your bill is small and you also have PAYE income. If you cannot pay in full, HMRC's Time to Pay arrangements may help.

Yes — US citizens are taxed on worldwide income, including UK self-employment profit. The Foreign Tax Credit usually relieves the income-tax side, but US self-employment tax (15.3%) is a separate charge. The US/UK Totalization Agreement generally exempts you from US self-employment tax if you pay UK National Insurance, evidenced by a certificate of coverage — a key point for American freelancers in Britain.

It uses the 2025/26 personal allowance with the £100k taper, the 20%/40%/45% Income Tax bands and the 6%/2% Class 4 NIC rates, stacking any other income below your profit — so it is accurate for typical sole traders. It does not model student loan repayments, pension contributions, the marriage allowance or Scottish rates, so treat it as a strong estimate.

No. If you or your partner receive Child Benefit and your income is over £60,000, a separate High Income Child Benefit Charge may claw some of it back through Self Assessment. This calculator covers Income Tax and Class 4 NIC on your profit only, so factor that charge in separately if it applies to you.

Personal pension contributions can reduce the tax on your profit by extending your basic-rate band, giving higher-rate relief, and they can also help restore a tapered personal allowance. This calculator does not model pension contributions, so if you pay into a pension your actual tax may be lower than shown — a common and valuable planning area for the self-employed.

The calculation runs entirely in your browser and nothing is stored unless you choose to download the branded PDF report, at which point you provide your name and email so we can send it. Phone and address are optional.

Yes. Enter your name and email (phone and address optional) and we generate a TaxStone-branded PDF of your Self Assessment estimate to download instantly — useful for budgeting for your January payment or sharing with your accountant.

For anything beyond a simple sole-trader position — multiple income sources, a company decision, pension planning, or US/UK exposure — professional advice usually pays for itself in tax saved and penalties avoided. Book a free 20-minute call with a TaxStone adviser to review your position.