Your income details
£
£
£
£
Estimated take-home pay
£0
after all tax and NI
£0Income tax
£0Class 4 NI
AbolishedClass 2 NI
0%Effective tax rate
For guidance only — not financial, tax or legal advice. Verify with a qualified professional.
About self-employed tax in 2026/27
What taxes do self-employed people pay?
As a sole trader you pay: income tax on profits above the personal allowance (£12,570); Class 4 National Insurance at 6% on profits between £12,570 and £50,270, and 2% above. Class 2 NI was abolished from April 2024. You file and pay via Self Assessment, with the main deadline of 31 January following the tax year end.
What expenses can I deduct as a sole trader?
Allowable business expenses include: office costs, travel (business miles at HMRC mileage rates), stock and materials, marketing and advertising, professional fees (accountant, solicitor), training directly related to your work, and use of home for work. Personal expenses, client entertaining, and fines are not deductible.
When do I need to pay tax on account?
If your Self Assessment tax bill exceeds £1,000, HMRC requires you to make payments on account — two advance payments toward next year's bill, due 31 January and 31 July. Each payment is 50% of your previous year's bill. This catches many first-year self-employed people off-guard — budget for it from day one.
Should I register for VAT?
Registration is mandatory if your taxable turnover exceeds £90,000 in a 12-month period. You can register voluntarily below this threshold. VAT registration has pros (reclaim input VAT, can appear more established) and cons (admin burden, may make you less competitive if customers can't reclaim VAT). Many small businesses use the Flat Rate Scheme to simplify VAT accounting.