Self-Employed Tax Calculator
Estimate your income tax, National Insurance, and take-home pay as a UK sole trader or freelancer. Uses 2024/25 tax rates.
Your income & deductions
Allowable expenses reduce your taxable profit
Personal pension contributions get tax relief
How UK self-employed tax works
As a self-employed sole trader in the UK, you pay tax on your profits — that is, your income minus your allowable business expenses. You report this through Self Assessment, filing a tax return each year by 31 January.
Self-employed people pay Income Tax and two types of National Insurance — Class 2 and Class 4. Unlike an employee, no tax is deducted at source; you pay it directly to HMRC, usually in two payments on account each year.
2024/25 tax rates for self-employed
| Tax | Rate | On |
|---|---|---|
| Income Tax — Basic rate | 20% | £12,570–£50,270 profit |
| Income Tax — Higher rate | 40% | £50,270–£125,140 profit |
| Income Tax — Additional rate | 45% | Over £125,140 profit |
| Class 2 NI | £3.45/week | Profit over £12,570 |
| Class 4 NI | 9% / 2% | £12,570–£50,270 / over £50,270 |
Reducing your tax bill: allowable expenses
As a sole trader, you can deduct allowable business expenses from your income before calculating tax. Common allowable expenses include:
- •Home office costs — a proportion of heating, electricity, and broadband if you work from home
- •Equipment and software — laptops, phones, subscriptions, tools of your trade
- •Travel costs — mileage, train fares, and accommodation for business trips (not commuting)
- •Professional fees — accountant fees, professional memberships, insurance
- •Pension contributions — payments into a personal pension reduce your taxable income
Frequently asked questions
When do I pay self-employed tax?
Self Assessment tax returns are due by 31 January each year. Your first bill includes the tax owed plus a Payment on Account (50% of your tax bill) towards the following year. The second Payment on Account is due on 31 July.
What is the trading allowance?
The £1,000 trading allowance means you do not need to register as self-employed or pay tax if your gross self-employed income is under £1,000 in a tax year.
Do I need to register for VAT?
You must register for VAT if your VAT-taxable turnover exceeds £90,000 in any rolling 12-month period. Below this threshold, registration is optional but you can voluntarily register to reclaim VAT on business purchases.
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