Self-employed tax calculator 2026/27
Work out Income Tax and Class 4 National Insurance on your sole trader or freelance profit — including expenses or the £1,000 trading allowance, pension contributions, student loans and Scottish rates — and see what to set aside for the 31 January Self Assessment bill.
Worked example: £35,000 turnover, £5,000 expenses
The interactive calculator on this page handles any figures. This example shows exactly how a 2026/27 bill is built for a sole trader with £35,000 of turnover and £5,000 of allowable expenses, at England, Wales and Northern Ireland rates with no student loan or pension.
| Calculation | Annual amount |
|---|---|
| Gross turnover | £35,000 |
| Allowable expenses | −£5,000 |
| Trading profit | £30,000 |
| Personal Allowance | −£12,570 |
| Taxable profit | £30,000 |
| Income Tax | £3,486 |
| Class 4 National Insurance | £1,046 |
| Total Self Assessment bill | £4,532 |
| Take-home after tax | £25,468 |
Effective deduction rate on this profit: 15.1%. The marginal rate — what you keep losing from each extra pound of profit at this level — is 26.0%.
Key Self Assessment dates
- 5 October — register for Self Assessment after your first tax year of trading.
- 31 January — online return, balancing payment, and first payment on account.
- 31 July — second payment on account on bills over £1,000.
Nothing is collected at source when you are self-employed: the whole year's bill arrives through Self Assessment, so the reserve matters as much as the rate.
Trading allowance or expenses?
Sole traders choose between actual allowable expenses and the flat £1,000 trading allowance — never both. If your expenses are small, the allowance is simpler and often worth more; once expenses pass £1,000, claiming them usually wins. Flip the calculator's trading-allowance switch to compare both and keep whichever leaves you better off.
The first-year trap: payments on account
On the example above, the £4,532 bill passes the £1,000 threshold, so HMRC also asks for two advance payments of 50% — £2,266 each — towards next year's bill. The first 31 January payment is therefore £4,532 + £2,266 = £6,798, roughly 150% of one year's tax in a single month.
Making Tax Digital from April 2026
If your combined gross self-employment and property income (before expenses) on your prior tax return is over £50,000, Making Tax Digital for Income Tax applies from April 2026; the threshold falls to £30,000 in April 2027. You send quarterly updates through software and still complete a final declaration — the payment dates are unchanged. Check your exact start date →
Frequently asked questions
How is self-employed tax calculated?
Tax is charged on your profit — turnover minus allowable business expenses (or the £1,000 trading allowance if that is worth more). Income Tax uses the same bands as employment: nothing on the first £12,570 of income, then 20% up to £50,270, 40% above it and 45% on taxable income over £125,140. Class 4 National Insurance is 6% of profits between £12,570 and £50,270, then 2% above that.
Do sole traders still pay Class 2 National Insurance?
No compulsory Class 2 NI has been charged since April 2024 — the calculator charges £0. If your profits are below £7,105 you can choose to pay Class 2 voluntarily to protect your State Pension record.
Should I claim the trading allowance or my actual expenses?
Claim whichever is larger. If allowable expenses are under £1,000, the flat trading allowance usually wins and needs no receipts. Above that, actual expenses reduce your bill more. You cannot deduct both.
What are payments on account?
Once your Self Assessment bill passes £1,000 (and less than 80% of your tax is collected through PAYE), HMRC asks for two advance payments of 50% of the bill each, due 31 January and 31 July. In the first year this happens, the January payment is effectively 150% of one year's tax.
When does Making Tax Digital start for sole traders?
Your combined gross income from self-employment and property (before expenses), as reported on your prior tax return, decides when you join: over £50,000 from April 2026, and over £30,000 from April 2027. Quarterly updates through software are additional reporting — you still send a final declaration and pay by the normal Self Assessment dates.
Take-home at common profit levels
See the full breakdown — tax bands, NI bands and monthly set-aside — at every common profit level: