Self-employed tax calculator for tradespeople

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.