Self-Employed Tax Calculator

Understanding Self-Employed Tax in the UK

As a self-employed tradesman or sole trader in the UK, your tax obligations are different from employees. You're responsible for calculating and paying your own income tax and National Insurance contributions through the Self Assessment system.

Your tax is calculated on your taxable profit — that's your total income minus your allowable business expenses. For 2025/26, the first £12,570 of profit is tax-free (your personal allowance). After that, you pay 20% basic rate on income up to £50,270, 40% higher rate up to £125,140, and 45% additional rate on anything above.

On top of income tax, you also pay National Insurance. Class 2 is a flat £3.45 per week if your profits exceed £12,570. Class 4 is 6% on profits between £12,570 and £50,270, then 2% on profits above £50,270. These are all collected through your annual Self Assessment return, due by 31 January.

Why Expenses Matter More Than You Think

Every pound of allowable expense you claim reduces your taxable profit — and therefore your tax bill. If you're a basic rate taxpayer, a £1,000 expense you forgot to claim costs you £260 in unnecessary tax (20% income tax + 6% Class 4 NI).

Common expenses tradesmen miss include: mileage to and from jobs (45p/mile for the first 10,000 miles), phone bills (business percentage), home office costs if you do admin from home, training courses, professional subscriptions, workwear (safety boots, high-vis), and even the cost of washing work clothes.

The key rule: expenses must be "wholly and exclusively" for business purposes. Mixed-use items (like a phone used for both personal and business) can be claimed proportionally.

Payments on Account — The Hidden Surprise

If your Self Assessment tax bill exceeds £1,000, HMRC requires "Payments on Account" — advance payments towards next year's bill. You pay two instalments, each equal to 50% of your previous year's tax bill: one on 31 January and one on 31 July.

This means in your first year of Self Assessment, you could pay up to 150% of your tax bill in January — the full year's tax plus the first advance payment. Many first-time self-employed workers get caught out by this. The solution: set aside money monthly from day one. This calculator shows you exactly how much.

This calculator uses the latest 2025/26 HMRC rates to give you an instant estimate of your tax bill. It includes income tax, both classes of National Insurance, student loan repayments, and expense analysis. All calculations run in your browser — nothing is stored or sent anywhere.