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SELF-EMPLOYED / 2026-27 / UK

Self-employed tax calculator (UK sole trader)

Estimate a UK sole trader's 2026/27 tax bill: Income Tax and Class 4 National Insurance on your profits, with Class 2, student loan and the trading allowance.

Last verified: Methodology

Your details

01Business

Worth it only if your expenses are under £1,000.

Where you live

Scottish Income Tax applies if you live in Scotland. Wales and Northern Ireland use the same rates as England in 2026/27.

02Student loan

Plan 1: started before Sept 2012 (England/Wales) or Northern Ireland. Plan 2: England Sept 2012 – July 2023, or Wales from Sept 2012. Plan 4: Scotland. Plan 5: England from Aug 2023.

Master's or Doctoral Loan, repaid at 6% alongside any plan.

Tax and NI to pay

£5,832

for 2026/27 on £35,000 profit

Income Tax
£4,486
Class 4 NI
£1,345.80
Class 2 NI
£0.00
Student loan
£0
Taxable profit
£35,000
Profit after tax and NI
£29,168
Per month
£2,431
Set aside per month
£486
Share of profit
16.7%
  • Profits are over £7,105, so Class 2 is treated as paid and counts towards your State Pension at no cost.
  • Setting aside about £486 a month covers this bill. Payments on account (two advance payments towards next year's bill) are not included.
  • Assumes self-employment is your only income. Employment income, dividends or rent would change the bands.

Tax and NI to pay: £5,832 for 2026/27 on £35,000 profit

Sole trader tax 2026/27
LineYearMonth
Income (turnover)£40,000£3,333
Allowable expenses£5,000£417
Taxable profit£35,000£2,917
Income Tax (England & Northern Ireland)£4,486£374
Class 4 National Insurance£1,346£112
Profit after tax and NI£29,168£2,431
Where your profit goes
83%TAKE-HOME
  • Kept£29,16883%
  • Income Tax£4,48613%
  • Class 2 and 4 NI£1,3464%

£5,832

for 2026/27 on £35,000 profit

How it's calculated

As a sole trader you pay tax on your profit: your income (turnover) minus allowable business expenses. If your expenses are small, you can deduct the £1,000 trading allowance instead.GOV.UK On that profit, your 2026/27 Self Assessment bill is made up of:

  • Income Tax. The same Personal Allowance and bands as employees: £12,570 tax-free, then 20%, 40% and 45% in England, Wales and Northern Ireland, or the six Scottish rates if you live in Scotland.HMRC
  • Class 4 National Insurance. 6% on profits between £12,570 and £50,270, and 2% above.
  • Class 2 National Insurance. Nothing to pay if your profits are £7,105 or more: it is treated as paid. Below that you can choose to pay £3.65 a week to keep your State Pension record.GOV.UK
  • Student loan, if you have one: 9% of income over your plan's yearly threshold (6% over £21,000 for a Postgraduate Loan).GOV.UK

The formula

  1. Profit = income − expenses (or income − trading allowance).
  2. Income Tax = band rates × (profit − Personal Allowance), with the allowance tapered above £100,000.
  3. Class 4 = 6% × (profit between the limits) + 2% × (profit above the upper limit).
  4. Total = Income Tax + Class 4 + any voluntary Class 2 + student loan.

Worked example

With £40,000 of income and £5,000 of expenses (£35,000 profit) in England, the bill for the year is £5,832: £4,486 Income Tax and £1,345.80 Class 4. Setting aside £486 a month covers it.

£35,000 profit, EnglandSELF-EMPLOYED / 2026-27 / UK
LineYearMonth
Income (turnover)£40,000£3,333
Allowable expenses£5,000£417
Taxable profit£35,000£2,917
Income Tax (England & Northern Ireland)£4,486£374
Class 4 National Insurance£1,346£112
Profit after tax and NI£29,168£2,431

The same profit in Scotland costs £5,847.

£60,000 profit with a Plan 2 student loanSELF-EMPLOYED / 2026-27 / UK
LineYearMonth
Income (turnover)£60,000£5,000
Allowable expenses£0£0
Taxable profit£60,000£5,000
Income Tax (England & Northern Ireland)£11,432£953
Class 4 National Insurance£2,457£205
Student loan£2,755£230
Profit after tax and NI£43,356£3,613

Assumptions and limitations

  • Self-employment is your only income. A salary, pension, rent or dividends use up the allowance and bands first, so the tax on your profit would be higher.
  • Payments on account (advance payments towards next year's bill that HMRC may ask for) are not shown.
  • Capital allowances, losses and partnership shares are not modelled: include them in your expenses figure so that income minus expenses equals your taxable profit.
  • Pension contributions and Gift Aid, which can extend your basic rate band, are not included here; the UK Income Tax calculator handles relief-at-source pensions.
FAQ

Questions people ask

How much tax does a sole trader pay in the UK?

Sole traders pay Income Tax and Class 4 National Insurance on their profits, not on their turnover. In 2026/27 the first £12,570 of profit is usually tax-free, then Income Tax is charged at the normal rates for where you live. Class 4 is 6% on profits between £12,570 and £50,270 and 2% above. Everything is paid through your Self Assessment tax return.

What expenses can I deduct as a sole trader?

You can deduct allowable business costs such as stock and raw materials, office costs like stationery and phone bills, business travel, staff and subcontractor costs, insurance and bank charges, business premises, advertising, trade subscriptions and business training. You cannot claim for personal use, including the personal share of a phone or home. If your expenses add up to less than £1,000, the trading allowance may give you a bigger deduction.

What is the £1,000 trading allowance?

The trading allowance lets you earn up to £1,000 a year from self-employment without paying tax on it. If your income is higher, you can deduct £1,000 instead of your actual expenses when you work out your profit. It is worth using only when your real expenses are below £1,000, because you cannot claim both the allowance and your expenses.

Do I need to pay Class 2 National Insurance?

If your profits are £7,105 or more in 2026/27, you do not pay Class 2: it is treated as paid, so the year counts for your State Pension. If your profits are lower, Class 2 is voluntary at £3.65 a week. Paying it can be a cheap way to fill a gap in your National Insurance record, which matters for the State Pension and some benefits.

How much should I set aside for tax when self-employed?

A simple approach is to divide your expected yearly tax and National Insurance by twelve and move that amount to a separate account every month. The calculator shows this figure. Remember that once your tax bill is large enough, HMRC can also ask for payments on account towards next year, so the first January after a good year can be a bigger bill than expected.

When is self-employed tax due?

For the 2026/27 tax year, which ends on 5 April 2027, the online Self Assessment return and any balance you still owe are due by 31 January 2028. If you make payments on account, the two payments towards 2026/27 are due on 31 January 2027 and 31 July 2027, and the first payment towards 2027/28 also falls due on 31 January 2028. Late filing and late payment both lead to penalties and interest.

Sources

  1. HMRCRates and allowances: National Insurance contributions · retrieved 2026-10-16
  2. GOV.UKSelf-employed National Insurance rates · retrieved 2026-10-16
  3. HMRCIncome Tax rates and allowances for current and previous tax years · retrieved 2026-10-16
  4. GOV.UKIncome Tax rates and Personal Allowances · retrieved 2026-10-16
  5. GOV.UKIncome Tax in Scotland: 2026 to 2027 rates · retrieved 2026-10-16
  6. GOV.UKRepaying your student loan: What you pay · retrieved 2026-10-16

Last verified: CalcBloc Editorial Team