Self-Employed Tax Calculator

Sole traders, freelancers and self-employed contractors pay income tax on profit (income minus allowable expenses), plus Class 4 National Insurance at 6% on profits between £12,570 and £50,270 and 2% above. Class 2 NIC was effectively abolished from April 2024 — most self-employed people no longer pay the £3.45/week flat charge, although voluntary Class 2 contributions remain available at £3.50/week to maintain State Pension entitlement for those with profits below £6,725. Profits over the Personal Allowance use the same income tax bands as employees: 20% basic, 40% higher, 45% additional (or Scottish bands if you are a Scottish taxpayer). This calculator estimates total tax and NIC on your self-employment profit, models the £1,000 Trading Allowance for very small earnings, and shows the breakdown by tax type. Self-employed income tax is collected via Self Assessment. The annual return is due by 31 January following the tax year end (5 April), and payments on account — advance instalments of next year’s bill — are due 31 January and 31 July if your previous bill exceeded £1,000 and less than 80% was collected at source. It does not handle company-specific structures (use the Corporation Tax calculator if you trade through a limited company), CIS deductions for construction subcontractors, IR35 or off-payroll working rules for personal service companies, or VAT (separate £90,000 registration threshold — use the VAT calculator). Scottish self-employed sole traders use Scottish income tax rates on profits but UK-wide Class 4 NIC. Making Tax Digital for Income Tax Self Assessment (MTD ITSA) begins in April 2026 for self-employed and landlords with combined gross income above £50,000 — quarterly digital submissions through MTD-compatible software (Xero, FreeAgent, QuickBooks etc.) will be mandatory. The £30,000-£50,000 band joins from April 2027, and the £20,000-£30,000 band from April 2028. Start planning your bookkeeping process now if you are above the relevant thresholds. Rule of thumb: set aside 25-30% of profits in a separate tax savings account; higher earners above £50,270 should aim for 35-40%.