Question 1

How much tax do self-employed people pay?

Accepted Answer

Profit is your income minus allowable expenses. If your expenses are under £1,000, the calculator uses the £1,000 trading or property allowance instead, because that lowers your profit more. Income tax uses the standard bands for England, Wales and Northern Ireland: a £12,570 personal allowance, 20% up to £50,270, 40% up to £125,140 and 45% above. The allowance falls by £1 for every £2 of income over £100,000.

Question 2

What National Insurance do self-employed people pay?

Accepted Answer

Self-employed people pay Class 4 National Insurance: 6% on profits between £12,570 and £50,270 and 2% above. Class 2 no longer has to be paid. Landlords renting out property do not normally pay Class 4. Student loans are 9% of profit above your plan's threshold (6% for postgraduate loans).

Question 3

What are payments on account?

Accepted Answer

If your tax and Class 4 bill is £1,000 or more, HMRC usually asks for half of next year's bill in advance on 31 January and the other half on 31 July. This does not apply if more than 80% of your tax is already taken through PAYE. In your first year, your January bill can be up to one and a half times the year's tax for this reason. Rates last checked against gov.uk on 11 October 2026.

Self-Employed Tax Calculator 2026/27

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Earning over £20,000 a year from this?