If you are self-employed in the UK — a sole trader or freelancer — your two big annual charges are Income Tax on your trading profit and Class 4 National Insurance on that same profit. Both use the 2026/27 bands (6 April 2026 to 5 April 2027): a £12,570 Personal Allowance, 20% basic rate to £50,270, 40% higher rate to £125,140, and 45% above — with the allowance tapering away above £100,000.

Enter your annual profit after expenses and this calculator walks the bands for you, adds Class 4 NICs at 6% and 2%, and shows the figure HMRC will likely ask for next: each payment on account, due 31 January and 31 July. It is an estimate, not advice — but it tells you what to set aside.

Key takeaways

  • UK Income Tax 2026/27: £12,570 tax-free Personal Allowance, 20% to £50,270, 40% to £125,140, 45% above — bands are frozen, so check the current tax year before relying on old figures.
  • The Personal Allowance shrinks above £100,000 — you lose £1 for every £2 over, which creates an effective 60% marginal rate until the allowance is gone at £125,140.
  • Class 4 National Insurance is a separate charge: 6% on profits between £12,570 and £50,270, then 2% above. Compulsory Class 2 payments were abolished from April 2024.
  • Payments on account are usually due when your Self Assessment bill exceeds £1,000 — two instalments each worth 50% of the bill, due 31 January and 31 July.
  • Enter profit after expenses: your trading income minus allowable business costs. Lower profit means lower tax and NICs — track expenses all year, not in January.

Tax figures are for the UK 2026/27 tax year.

£

Annual self-employed profit after expenses (trading income minus allowable business costs).

Income Tax (2026/27)—At England, Wales and Northern Ireland rates. Scotland sets its own bands.
Class 4 National Insurance—6% on profits £12,570–£50,270, 2% above.
Total Income Tax + NI—Your combined 2026/27 bill for Income Tax and Class 4 NICs.
Effective tax rate—Total bill as a percentage of your profit.
Estimated take-home—Profit left after Income Tax and Class 4 NICs.
Payment on account—Each payment — due 31 January and 31 July. HMRC usually requires these when your Self Assessment bill exceeds £1,000.

How it works

  1. Enter your annual self-employed profit — trading income minus allowable business expenses — for the 2026/27 tax year (6 April 2026 to 5 April 2027).
  2. Your Personal Allowance is set at £12,570, then reduced by £1 for every £2 of profit above £100,000 (fully withdrawn by £125,140).
  3. Income Tax is charged band by band at England, Wales and Northern Ireland rates: 20% on the first £37,700 above your allowance, 40% up to £125,140, 45% above.
  4. Class 4 National Insurance is calculated separately: 6% on the slice of profit between £12,570 and £50,270, and 2% on anything above £50,270.
  5. Income Tax plus Class 4 gives your total bill. The effective rate shows it as a percentage of profit, take-home is what is left, and each payment on account is 50% of the total (due 31 January and 31 July).

Worked example

Worked example — £40,000 profit in 2026/27. The Personal Allowance is the full £12,570 (no taper below £100,000), so £27,430 of profit is taxable. All of it falls inside the basic-rate band, so Income Tax is 20% × £27,430 = £5,486.00. Class 4 National Insurance is charged on the same £27,430 slice at 6%: 0.06 × £27,430 = £1,645.80 (nothing at 2%, since profit is below £50,270). That gives a total bill of £7,131.80, an effective rate of 17.83%, and estimated take-home of £32,868.20. Because the bill exceeds £1,000, HMRC would expect payments on account of £3,565.90 each, due 31 January and 31 July.

Frequently asked questions

Which UK tax year do these figures cover?

The 2026/27 tax year, which runs from 6 April 2026 to 5 April 2027. The Personal Allowance (£12,570) and the £50,270 and £125,140 thresholds have been frozen for several years, so older calculators may look similar — but always check the tax year before relying on a figure, because thresholds and reliefs can change.

What happened to Class 2 National Insurance?

From 6 April 2024, self-employed people no longer have to pay compulsory Class 2 contributions. Instead, if your profits are £7,105 or more a year, Class 2 is treated as having been paid — which protects your National Insurance record and your State Pension entitlement without you paying anything extra. If your profits are below £7,105, you can choose to pay voluntary Class 2 contributions (currently £3.65 a week) to keep your record intact.

Is the profit figure before or after expenses?

After. Enter your trading income minus allowable business expenses — the figure HMRC calls your profit and taxes. Allowable expenses are genuine business costs: mileage, professional subscriptions, office costs, business travel, equipment, and a proportion of home working costs. Personal spending is not deductible. The difference matters: every £1 of legitimate expenses removes £1 from your taxable profit, so tracking costs all year is the single highest-value habit for a sole trader.

What is the £100,000 Personal Allowance taper?

Once your income passes £100,000, your £12,570 Personal Allowance shrinks by £1 for every £2 you earn above that line, and it disappears entirely at £125,140. The effect is an effective marginal rate of 60% between £100,000 and £125,140 — you pay 40% on the new income plus extra tax on the allowance you have just lost. If your profit is near six figures, a pension contribution that brings your income back under £100,000 can restore the full allowance, so it is worth discussing with an accountant.

What are payments on account?

Advance payments towards next year's tax bill. HMRC usually requires them when your Self Assessment bill is over £1,000 and less than 80% of your tax was collected at source. You pay in two equal instalments — each half of the previous year's bill — due by 31 January and 31 July. The classic shock is the first year: your January payment covers the year just ended plus the first instalment of the next, which is 1.5× your bill in one go. That is why the calculator shows the figure front and centre.

What if my payments on account are too high because my income fell?

You can ask HMRC to reduce them — via your online tax account or form SA303. Do it carefully: if you reduce them too far and underpay, HMRC charges interest on the shortfall. If the reduced payments turn out to be more than your actual bill, HMRC refunds the difference after you file your return. The system assumes your income stays roughly the same year to year, so review the instalments rather than letting them run on autopilot.

Does this calculator work for Scotland?

Only as a rough guide — Scotland sets its own Income Tax bands and rates (including starter, intermediate, advanced and top rates that differ from the rest of the UK). The calculator uses the England, Wales and Northern Ireland bands. If your main home is in Scotland, check the Scottish bands on GOV.UK and expect a different bill for the same profit.

Do I need to register as self-employed, and when?

You must tell HMRC when you become self-employed as a sole trader or in a partnership — do not wait until January. Registration gives you a Unique Taxpayer Reference (UTR), which arrives by post and is required to file your Self Assessment return. Registering early removes the risk of missing your first deadlines.

What is Making Tax Digital for Income Tax?

HMRC's move to digital tax reporting. From 6 April 2026, sole traders and landlords with qualifying income over £50,000 must keep digital records in MTD-compatible software and send quarterly updates to HMRC, plus a year-end final declaration. The threshold drops to £30,000 from April 2027 and £20,000 from April 2028. Qualifying income is your gross turnover before expenses — not your profit — so more people are in scope than expect.

Does the estimate include student loan repayments or other income?

No — and that is deliberate. The calculator estimates Income Tax plus Class 4 National Insurance on self-employed profit only. It does not include student or postgraduate loan repayments, PAYE employment income, rental income, dividends, capital gains, or pension contributions. If your finances include any of those, your real Self Assessment position will differ, and an accountant can model the full picture.

When do I file and pay for 2026/27?

The 2026/27 tax year ends on 5 April 2027. The online Self Assessment deadline — filing your return and paying any balancing payment plus the first payment on account for 2027/28 — is 31 January 2028. The second payment on account is due 31 July 2028. Missed filing and payment deadlines attract fixed penalties, daily penalties and interest, so put the dates in your calendar as soon as you register.

Should I use an accountant instead of a calculator?

Use both. A calculator is for planning — setting aside the right percentage, avoiding the January shock, and sanity-checking quotes. An accountant is for the return itself once your affairs get beyond simple trading income: multiple income sources, the £100k taper zone, property, dividends, or Making Tax Digital. This tool is an estimate only and is not professional advice; for decisions with real money behind them, verify with HMRC or a qualified accountant.

Sources

Last verified: 2026-09-25 This calculator is for general information only and is not tax advice. Tax rules change frequently — verify with a qualified professional before acting.

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