How self-employed tax works
As a sole trader you pay tax on your profit — your turnover minus allowable expenses. Two things are charged: Income Tax (using the same bands and £12,570 personal allowance as employees) and Class 4 National Insurance. For 2026/27 Class 4 NI is 6% on profits between £12,570 and £50,270, and 2% above £50,270. Class 2 NI is treated as paid once your profits are above the small-profits threshold, so there is usually nothing extra to pay.
Worked example: £30,000 profit
• Income Tax: 20% of (£30,000 − £12,570) = £3,486
• Class 4 NI: 6% of (£30,000 − £12,570) = £1,046
• Total Self Assessment bill ≈ £4,532
If your bill is over £1,000 you'll usually also make “payments on account” — advance instalments towards next year's tax, due on 31 January and 31 July.
Frequently asked questions
How much tax will I pay if I'm self-employed?
On a £30,000 profit for 2026/27 you'd pay roughly £4,532 — £3,486 Income Tax plus £1,046 Class 4 National Insurance.
What is Class 4 National Insurance?
It's the main National Insurance for the self-employed: 6% on profits between £12,570 and £50,270, and 2% on profits above £50,270 for 2026/27.
Do I still pay Class 2 National Insurance?
For 2026/27 Class 2 is treated as paid once your profits exceed the small-profits threshold, so there is usually nothing to pay.
What are payments on account?
If your Self Assessment bill is over £1,000, HMRC asks for advance payments towards next year — typically half the bill on 31 January and half on 31 July.
When is the Self Assessment deadline?
Online returns and payment for a tax year are due by 31 January following the end of that tax year.