Self-Employed Tax Calculator 2026/27

For 2026/27 in England, Wales or Northern Ireland: Income Tax of £3,486 (20% on the £17,430 above your £12,570 personal allowance) plus Class 4 National Insurance of about £1,046 (6% on the same band) — roughly £4,532 in total, leaving about £25,468, or £2,122 a month. Put your own profit into the calculator for the exact split and your payments on account.

Sole traders pay income tax on their profit using the same bands as employees — no tax up to £12,570, then 20%, 40% and 45% (different bands in Scotland) — plus Class 4 National Insurance. There is no PAYE, so you pay through Self Assessment.

For 2026/27, Class 4 NI is 6% on profits between £12,570 and £50,270, and 2% on profits above £50,270. It is worked out on your profit, before any personal pension contribution, and paid through Self Assessment.

Class 2 National Insurance is treated as paid if your profits are £7,105 or more in 2026/27 (the Small Profits Threshold), so you build up your State Pension record without paying Class 2. If your profits are below £7,105, you can choose to pay voluntary Class 2 contributions of £3.65 a week to protect your State Pension record.

If your Income Tax and Class 4 National Insurance come to more than £1,000, HMRC asks for two payments on account towards next year — each 50% of this year’s Income Tax and Class 4 NI (the “relevant amount”), due by 31 January and 31 July. Student loan repayments and any Capital Gains Tax are not included in payments on account — they fall only into the following January balancing payment. Your first January payment therefore covers this year’s bill in full plus the first instalment towards next year.

Claim all allowable business expenses to lower your profit, and pay into a personal pension — pension contributions reduce your income tax (though not Class 4 NI). Keeping good records and using the trading allowance where it helps can also reduce the bill.

For 2026/27, the trading allowance is £1,000. The government has announced an increase to £3,000 from 6 April 2027, subject to legislation. This does not change calculations for 2026/27. It covers eligible trading or miscellaneous income, not an extra Personal Allowance. For the same trade, choose the allowance instead of actual business expenses, not both. Eligibility exclusions include partnership income and income from your employer or a connected company. Relief on this income does not remove other Self Assessment obligations. The trading allowance is not a deduction from earnings reported for Universal Credit. This change does not alter the property allowance or Making Tax Digital qualifying-income thresholds. Check HMRC guidance for your circumstances.

If this is your first year as a sole trader, you usually need to register for Self Assessment by 5 October following the end of the tax year you started — for example, by 5 October 2027 for the 2026/27 tax year. You then file your return and pay any tax due by 31 January.