Free tax calculator · 2026 to 2027 rates
How much tax should I set aside each quarter?
The short answer
Enter your takings and costs for each quarter so far, and the calculator estimates the Income Tax and Class 4 National Insurance on your profit for 2026 to 2027, what you should have put aside by now, and what your January bill could look like. On £30,000 of profit, it is about £4,532.
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4 quarters
entered as you go, matching your Making Tax Digital updates
- £12,570
- Personal Allowance before tax starts
- 20% / 40%
- basic and higher rate (England, Wales, NI)
- 6% / 2%
- Class 4 National Insurance on profit
- 31 Jan
- when the bill and first payment on account are due
The quick answer
Self-employed tax on common profits, 2026 to 2027
Income Tax and Class 4 National Insurance on a year’s profit in England, Wales or Northern Ireland, with no other income. Use the calculator for your own figures, a salary on top, or Scotland.
| Profit | Income Tax | Class 4 NI | Total | Set aside a quarter | % of profit |
|---|---|---|---|---|---|
| £15,000 | £486 | £146 | £632 | £158 | 4% |
| £20,000 | £1,486 | £446 | £1,932 | £483 | 10% |
| £25,000 | £2,486 | £746 | £3,232 | £808 | 13% |
| £30,000 | £3,486 | £1,046 | £4,532 | £1,133 | 15% |
| £40,000 | £5,486 | £1,646 | £7,132 | £1,783 | 18% |
| £50,000 | £7,486 | £2,246 | £9,732 | £2,433 | 19% |
| £60,000 | £11,432 | £2,457 | £13,889 | £3,472 | 23% |
| £80,000 | £19,432 | £2,857 | £22,289 | £5,572 | 28% |
| £100,000 | £27,432 | £3,257 | £30,689 | £7,672 | 31% |
How it works
From four quarters to one tax bill
Under Making Tax Digital you send HMRC a summary of your takings and costs every quarter, but the tax is still worked out on the whole year. The calculator mirrors that. It adds up the quarters you have entered, estimates the full year from them, and works out the tax on that year’s profit: takings minus allowable costs.
It then applies the 2026 to 2027 rates: the £12,570 Personal Allowance, Income Tax at 20%, 40% and 45% (or the Scottish rates), and Class 4 National Insurance at 6% on profit between £12,570 and £50,270 and 2% above. If you have a salary or pension, it is counted first, because PAYE has already used part of your allowance and bands.
The “put aside so far” figure is your share of the year’s tax for the profit you have made to date. Move that into a separate savings account each quarter, when you send your update, and the January bill holds no surprises. The deadline calendar adds every update and payment date to your phone.
Worked examples
What four sole traders would set aside
Full-year figures for 2026 to 2027 in England, Wales or Northern Ireland, worked out with the same maths as the calculator. Illustrative people, not real cases.
| Who | Figures | Profit | Tax and NI | Each quarter |
|---|---|---|---|---|
| Mobile hairdresser | £34,000 takings, £6,000 costs | £28,000 | £4,012 | £1,003 |
| Plumber | £62,000 takings, £18,000 costs | £44,000 | £8,172 | £2,043 |
| Private hire driver | £45,000 takings, £14,000 costs | £31,000 | £4,792 | £1,198 |
| Cleaner with a part-time job | £31,000 takings, £4,000 costs, £12,000 salary | £27,000 | £6,152 | £1,538 |
The plumber shows why takings are a poor guide: £62,000 coming in, but tax on £44,000 of profit. The cleaner shows the effect of a job: the salary uses up the Personal Allowance, so every pound of cleaning profit is taxed at 20%. For the vehicle, the mileage calculator shows whether the 55p rate or actual costs claims more. Trade guides explain the costs each business can claim: plumbers and electricians, drivers, hair and beauty, cleaners and carers and builders.
The January surprise
Payments on account, explained
If your Self Assessment bill is over £1,000, HMRC usually asks for payments on account: two advance payments towards next year, each half of this year’s bill, due on 31 January and 31 July. The exception is when more than 80% of your tax was already collected at source, for example through PAYE.
The first time it happens, the January payment is the full bill for the year just ended plus the first half of next year’s. Someone whose bill is £5,000 pays £7,500 that January and £2,500 the following July. After that, payments settle into a rhythm, with a balancing payment or refund each January.
Making Tax Digital does not change these dates. What it changes is that you see your profit building up every quarter, so there is no reason to be caught out. The calculator shows the first-January figure whenever your estimated bill is over £1,000.
What it leaves out
Student loan repayments, pension contributions and Gift Aid, savings, dividends and rental income, capital allowances, and tax you have already paid on account. If any of those apply, your real bill will differ.
Not sure about your costs?
Every allowable cost you miss is profit you pay tax on. An accountant will make sure the van, the phone, the kit and the training are all claimed, and file the quarterly updates for you.
Do you need Making Tax Digital?
Takings decide if you are in, profit decides the bill
Making Tax Digital for Income Tax starts on 6 April 2027 for sole traders and landlords whose takings, before costs, were over £30,000 on their 2025 to 2026 return, and on 6 April 2028 for those over £20,000. Use the MTD checker to see your start date, and the guide to MTD for Income Tax for what the quarterly updates involve.
Answered
Self-employed tax: the questions people ask
How much tax should I set aside if I am self-employed?
Set aside a share of your profit, not your takings. For 2026 to 2027 in England, Wales or Northern Ireland, £30,000 of profit means £3,486 Income Tax plus £1,046 Class 4 National Insurance, £4,532 in all (15% of profit). Many sole traders save 20% to 30% of profit to be safe; the calculator works out your own figure. Source
What percentage of my income should I save for tax?
It rises with profit. About 10% of profit at £20,000, 15% at £30,000, 19% at £50,000 and 28% at £80,000 for 2026 to 2027, before student loans or other income. Saving a fixed 25% covers most basic-rate sole traders. Source
How much tax do I pay on £20,000 profit self-employed?
For 2026 to 2027 in England, Wales or Northern Ireland, with no other income: £1,486 Income Tax plus £446 Class 4 National Insurance, £1,932 in all (10% of profit). Source
How much tax do I pay on £30,000 profit self-employed?
For 2026 to 2027 in England, Wales or Northern Ireland, with no other income: £3,486 Income Tax plus £1,046 Class 4 National Insurance, £4,532 in all (15% of profit). Source
How much tax do I pay on £40,000 profit self-employed?
For 2026 to 2027 in England, Wales or Northern Ireland, with no other income: £5,486 Income Tax plus £1,646 Class 4 National Insurance, £7,132 in all (18% of profit). Source
How much tax do I pay on £50,000 profit self-employed?
For 2026 to 2027 in England, Wales or Northern Ireland, with no other income: £7,486 Income Tax plus £2,246 Class 4 National Insurance, £9,732 in all (19% of profit). Profit above £50,270 is taxed at 40%, with National Insurance at 2%. Source
How is self-employed tax calculated?
Take your takings, subtract allowable costs to get profit, then take off the £12,570 Personal Allowance. Income Tax is 20% on the next £37,700 of taxable profit, 40% above that and 45% over £125,140. Class 4 National Insurance is 6% on profit between £12,570 and £50,270 and 2% above. Source
Is self-employed tax based on takings or profit?
Profit: takings minus allowable costs. Making Tax Digital uses takings before costs to decide whether you have to join, but the tax itself is charged on profit. Source
What National Insurance do self-employed people pay?
Class 4 National Insurance: 6% on profit between £12,570 and £50,270 and 2% above that, for 2026 to 2027. Class 2 National Insurance has not been compulsory since April 2024, though you can pay it voluntarily, at £3.65 a week for 2026 to 2027, to protect your State Pension record if your profit is under £7,105. Source
How much can I earn before paying tax when self-employed?
£12,570 of total income a year, the Personal Allowance, for 2026 to 2027. Class 4 National Insurance also starts at £12,570 of profit. Separately, the first £1,000 of trading income is covered by the trading allowance if you choose to use it instead of claiming costs; Budget 2026 raises that to £3,000 from 6 April 2027. Source
When do I pay tax as a self-employed person?
Through Self Assessment: the balance for the tax year by 31 January after it ends, and, if you make payments on account, advance payments on 31 January and 31 July. For 2026 to 2027 the bill is due by 31 January 2028. Source
Do I pay tax every quarter under Making Tax Digital?
No. Quarterly updates are summaries of your income and costs, not tax bills. Payment dates stay the same: 31 January and, for payments on account, 31 July. You can choose to pay in instalments early through a budget payment plan. Source
What are payments on account?
Advance payments towards next year’s tax, each half of this year’s bill, due on 31 January and 31 July. You make them if your last bill was over £1,000, unless more than 80% of your tax was already collected at source, for example through PAYE. Source
Why is my first self-employed tax bill so high?
The first year your bill is over £1,000, the January payment can include that whole year’s bill plus the first payment on account for the next year: one and a half years of tax at once. A £5,000 bill becomes £7,500 in January and £2,500 in July. Source
Can I reduce my payments on account?
Yes, if you expect your profit to fall. You can ask HMRC to reduce them online or with form SA303. If you reduce them too far, you pay interest on the shortfall. Source
Are payments on account changing?
Not for 2026 to 2027. Budget 2026 announced that from April 2029 people who make payments on account will pay more regularly through the year, with automated payments and an option to pay through PAYE. The details are still to come. Source
Will the tax rates change for 2027 to 2028?
For self-employed profit, no change has been announced: Income Tax stays at 20%, 40% and 45%, Class 4 National Insurance at 6% and 2%, and the £12,570 Personal Allowance and higher-rate threshold are frozen until April 2031. Rental and savings income will be taxed at higher rates from April 2027. Source
I have a job and a side business. How is the tax worked out?
Your salary uses up your Personal Allowance and tax bands first, and your profit sits on top. So if your salary already uses the allowance, all your profit is taxed at 20% or more. Enter your salary in the calculator and it does this for you. Source
Which costs reduce my tax bill?
Costs that are wholly for the business: materials and stock, vehicle running costs or the mileage rate (our mileage calculator compares the two), tools and equipment, the business share of your phone, insurance, accountancy fees, uniforms and protective clothing, and training that relates to your business. Source
What is the 60% tax trap at £100,000?
Between £100,000 and £125,140 of total income, you lose £1 of Personal Allowance for every £2 over £100,000. Combined with 40% tax, that works out at an effective 60% on income in that range, before National Insurance. Source
Is self-employed tax different in Scotland?
Income Tax is: Scotland has its own bands and rates on earned income, which the calculator uses when you choose Scotland. National Insurance is the same across the UK. Source
Does VAT count in the tax calculation?
No. VAT is a separate tax with its own threshold and returns. If you are VAT registered, enter your takings and costs without VAT. Source
What happens if I cannot pay my tax bill?
Contact HMRC before the deadline. If you owe up to £30,000 you may be able to set up a Time to Pay plan online, paying in monthly instalments. Interest is charged on late tax, so it is cheaper to agree a plan early. Source
Should I keep tax money in a separate account?
It helps. Moving your set-aside amount into a separate savings account each quarter, when you send your Making Tax Digital update, keeps it out of day-to-day spending and earns a little interest until 31 January. Source
What does this calculator leave out?
Student loan repayments, pension contributions and Gift Aid, savings, dividends and rental income, capital allowances worked out by an accountant, and tax already paid on account. Treat the result as a guide. Source
Is this tax advice?
No. It is an estimate from the published 2026 to 2027 rates, to help you set the right amount aside. An accountant can work out your actual bill, make sure every allowable cost is claimed and send your quarterly updates. Source
Guides
MTD for Income Tax explainedWho is in, the dates, quarterly updates and what it costs.
Making Tax Digital for the self-employedWhat changes for sole traders from April 2027.
Making Tax Digital for landlordsRental income, joint ownership and overseas property.Self-employed mileage calculatorThe 55p rate or actual costs: which claims more.
MTD deadline calendarEvery update and payment date, added to your calendar.
Do I need to use Making Tax Digital?Check your qualifying income and start date.
MTD software or an accountant?Software, spreadsheets and bridging tools compared.
How to sign up for Making Tax DigitalSigning up yourself, or letting an accountant do it.MTD penalties and exemptionsPenalty points, late payment and who is exempt.Accountants for small businessWhat they do, what to ask and what they cost.MTD for builders and CIS subcontractorsHomeowner and contractor work, CIS and the reverse charge.MTD for plumbers and electriciansDeposits, van stock, scheme fees and card payments.MTD for taxi and delivery driversSeveral apps, platform reports and car costs.MTD for hair and beautyRent-a-chair, tips, products and mobile work.MTD for cleaners and carersMany small clients and travel between them.Sources
- GOV.UK: Income Tax rates and Personal Allowances
- GOV.UK: Self-employed National Insurance rates
- GOV.UK: Income Tax in Scotland
- GOV.UK: Understand your Self Assessment tax bill, payments on account
- GOV.UK: Budget 2026, overview of tax legislation and rates
- GOV.UK: Send quarterly updates
- GOV.UK: Work out your qualifying income
- GOV.UK: Find out if and when you need to use MTD for Income Tax
Written by the Compare Advantage team, Chorley. Facts checked against GOV.UK on 3 November 2026.
Compare Advantage is an introduction service. We are not an accountancy firm and do not give tax advice. We will contact you to introduce a local accountant who handles Making Tax Digital, and we tell you which firm before we pass on your details. Firms may pay us for the introduction. Guidance on this page is general and based on the GOV.UK sources linked on each page.