UK self-employed: how much to save for tax (2026 to 2027)
Income Tax and Class 4 National Insurance for sole traders, with worked examples at £20,000 to £60,000 profit and the 31 January / 31 July payment dates. Each figure comes from GOV.UK, with sources listed below.
As a self-employed sole trader in England, Wales or Northern Ireland, you pay Income Tax and Class 4 National Insurance on your profits (income minus allowable expenses), through Self Assessment. No tax is taken off when clients pay you, so it helps to move a share of each payment into a separate account.
1. The 2026 to 2027 rates
- Personal Allowance: £12,570 tax-free. It goes down by £1 for every £2 of income above £100,000.
- Income Tax: 20% on £12,571 to £50,270; 40% on £50,271 to £125,140; 45% above £125,140.
- Class 4 National Insurance: 6% on profits between £12,570 and £50,270, then 2% above £50,270.
- Class 2 National Insurance: if your profits are £7,105 or more, you don't pay it; it's treated as paid. Below that, you can choose to pay it voluntarily (£3.65 a week).
- If you're eligible, the trading allowance can cover your first £1,000 of self-employment income. It replaces deducting your actual business expenses: if you claim it, you can't deduct expenses as well, so compare the two first.
Scotland has its own Income Tax bands, so the Income Tax figures here won't match; Class 4 National Insurance is the same.
2. Worked examples (standard Personal Allowance, no other income)
| Profit | Income Tax | Class 4 NI | Total | % of profit |
|---|---|---|---|---|
| £20,000 | £1,486.00 | £445.80 | £1,931.80 | 9.7% |
| £30,000 | £3,486.00 | £1,045.80 | £4,531.80 | 15.1% |
| £40,000 | £5,486.00 | £1,645.80 | £7,131.80 | 17.8% |
| £60,000 | £11,432.00 | £2,456.60 | £13,888.60 | 23.1% |
Example: £40,000 profit − £12,570 = £27,430; × 20% = £5,486 Income Tax; × 6% = £1,645.80 Class 4. Student loan repayments, other income or pension contributions can change the result.
The percentage rises with profit, so saving a flat 20% can fall short as you earn more. Our kit's UK profile defaults to 25% of each payment; that is a planning default you can edit, not an HMRC figure.
3. When you pay: payments on account
If last year's Self Assessment bill was £1,000 or more (and less than 80% of your tax was already taken at source), HMRC asks for two payments on account, each half of last year's bill, due by 31 January and 31 July. Any balance is due by 31 January after the tax year ends. The first time this applies, you may pay your first year's full bill and your first payment on account in the same January, so set money aside from the start.
FAQ
How much should I save for tax as a self-employed person in the UK?
It depends on profit. With a standard Personal Allowance and no other income, 2026 to 2027 Income Tax plus Class 4 NI is about 15.1% of a £30,000 profit and 17.8% of £40,000. It keeps rising with profit, more steeply above £50,270.
Do I still pay Class 2 National Insurance?
No, not if your profits are £7,105 or more; it is treated as paid. Below that you can pay it voluntarily at £3.65 a week (2026 to 2027).
What are payments on account?
If last year’s bill was £1,000 or more, you make two advance payments towards your next bill, each half of last year’s tax, due by 31 January and 31 July.
Does this apply in Scotland?
Class 4 NI is the same, but Scottish Income Tax bands are different, so the Income Tax column won’t match.
Sources
Figures checked against these official pages on 18 October 2026. Rules change; always confirm with the source or a licensed tax professional.
- GOV.UK, Income Tax rates and Personal Allowances (6 April 2026 to 5 April 2027) (accessed 18 Oct 2026)
- GOV.UK, Self-employed National Insurance rates (2026 to 2027) (accessed 18 Oct 2026)
- GOV.UK, Understand your Self Assessment tax bill: payments on account (accessed 18 Oct 2026)
- GOV.UK, Tax-free allowances on property and trading income (accessed 18 Oct 2026)
Want a sheet that applies your own set-aside rate each time an invoice is marked Paid? The Tax Set-Aside Kit is a $29 Google Sheets + Notion template with editable country profiles.
This page is general information, not tax advice.