3 articles tagged with Class 4 National Insurance.
A sole trader earning £45,000 profit takes home more per pound than an employee on £45,000 salary, because Class 4 NI is lower than employee NI and there is no employer NI at all. Full 2026/27 comparison.
A sole trader earning GBP 60,000 pays Class 4 NI and higher-rate tax, but a GBP 10,000 SIPP contribution can reclaim GBP 2,000 of higher-rate relief on top of the basic 20% added at source. Here is the full worked example for 2026/27.
A side hustle making £5,000 profit on top of a salaried job is well past the £1,000 trading allowance, so it must be declared. Depending on whether you are a basic or higher-rate taxpayer, the tax and Class 4 NI bill ranges from roughly £1,090 to £2,090. Here is the full breakdown.
