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For sole traders and subcontractors · 2026/27

Self-employed tax calculator for tradespeople

The short answer

Self-employed people pay Income Tax and Class 4 National Insurance on their profit. On a £40,000 profit in 2026/27 that's about £7,132, or 17.83%. In your first year, remember payments on account: January can bring the year's bill plus half as much again.

Calculator

Work out your self-employed tax

Tax and NI to pay

£6,092

Income Tax £4,686 + Class 4 NI £1,406

Put aside each month

£508

Profit £36,000 · 16.92% of profit

First January bill

£9,138

Includes a £3,046 payment on account; another £3,046 is due in July

Estimate only, not tax advice. 2026/27 rates for England, Wales and Northern Ireland (Scottish Income Tax bands differ). Ignores student loans, pension contributions, Marriage Allowance and other income such as savings or rent.

Examples

Self-employed tax at different profits, 2026/27

Sole trader with no other income and no CIS deductions.

ProfitIncome TaxClass 4 NITotalPer month to saveFirst January bill
£20,000£1,486£446£1,932£161£2,898
£30,000£3,486£1,046£4,532£378£6,798
£40,000£5,486£1,646£7,132£594£10,698
£50,000£7,486£2,246£9,732£811£14,598
£70,000£15,432£2,657£18,089£1,507£27,133

Rates

Self-employed tax rates 2026/27

  • Personal allowance: £12,570 tax-free (reduced above £100,000 of income).
  • Income Tax: 20% to £50,270, 40% to £125,140, 45% above.
  • Class 4 NI: 6% on profits £12,570–£50,270, 2% above.
  • Class 2 NI: no longer compulsory.
  • Trading allowance: £1,000 as an alternative to expenses.

Dates

Key dates

  • 5 October: register for Self Assessment if you started in the last tax year.
  • 31 January: online tax return and payment for the last tax year, plus the first payment on account.
  • 31 July: second payment on account.
  • Making Tax Digital: quarterly digital updates from April 2026 if qualifying income is over £50,000 (£30,000 from April 2027, £20,000 from April 2028).

Expenses

Expenses tradespeople can claim

  • Materials and stock you use on jobs
  • Van costs (fuel, insurance, repairs) or simplified mileage
  • Tools and equipment (usually claimed in full through the Annual Investment Allowance)
  • Protective clothing and uniforms (not everyday clothes)
  • Public liability insurance and trade memberships
  • Phone, software and accountancy fees

Related

More tools for trades

Self-employed tax FAQs

You pay Income Tax and Class 4 National Insurance on your profit (takings minus allowable expenses). In 2026/27 the first £12,570 is tax-free, then Income Tax is 20% up to £50,270 and 40% above. On a £40,000 profit that's about £7,132 in total, or 17.83%.

Class 4 National Insurance: 6% on profits between £12,570 and £50,270, and 2% above that. Class 2 is no longer compulsory; if your profits are above the small profits threshold you get the State Pension credit automatically.

If your Self Assessment bill is over £1,000 (and less than 80% of your tax was taken at source), HMRC asks for two advance payments towards next year's bill, each half of this year's, due on 31 January and 31 July. In your first year this means January brings the whole year's bill plus the first advance payment.

A common rule of thumb is 20–30% of your profit. Use the calculator for your figure: on a £40,000 profit you'd put aside about £594 a month.

You can deduct a flat £1,000 instead of your actual expenses. It's worth it only if your real expenses are lower than £1,000; if your turnover is £1,000 or less you don't need to register or pay tax on it.

CIS deductions are advance payments towards your Income Tax and National Insurance. You enter them on your Self Assessment return and they come off your bill; if they add up to more than you owe, HMRC refunds the difference.

From April 2026, sole traders and landlords with more than £50,000 of qualifying income (gross takings from self-employment and property) must keep digital records and send quarterly updates using compatible software. The threshold falls to £30,000 from April 2027 and £20,000 from April 2028.

General information using 2026/27 rates for England, Wales and Northern Ireland, not tax advice. See GOV.UK for official rates.