Sole trader tax calculator

What to enter and what you get

Enter your profit for the tax year, after allowable expenses or the trading allowance. The calculator returns the Income Tax and Class 4 National Insurance on it, what you keep, and a monthly figure to set aside, with the payment-on-account schedule underneath.

• Choose Scotland if your main home is there: Income Tax bands differ, Class 4 does not.
• Add a student loan plan to include repayments on the same return.
• Use 2025/26 to check the bill for the return due on 31 January 2027.

Rates checked against Budget 2026 Annex A on 30 October 2026. Written and reviewed by James Whitfield against current GOV.UK and HMRC guidance. Estimates for planning only — not tax, accounting or financial advice.

How a sole trader's bill is built, from the first pound of profit

Everything starts from profit: what the business earned in the tax year less its allowable expenses, or less the £1,000 trading allowance if you use that instead. Income Tax and Class 4 National Insurance are then both worked out on that same profit, and the total is paid through Self Assessment by 31 January after the tax year ends. Nothing is taken at source, so the whole bill lands at once unless you have set money aside.

Where your profit sits decides which rules matter: under £7,105 your State Pension year is not automatic, under £12,570 there is nothing to pay, and £50,270, £100,000 and £125,140 each change the rate. The table shows the whole bill at each of those points, and the ladder further down shows what the next £1,000 costs; the calculator above works it out for the exact figure you enter.

The bill at each threshold, and four sole traders worked through for 2026/27

2026/27, England, Wales or Northern Ireland, no other income, student loan or pension.

A first year at £28,000: why January asks for more than the tax

A sole trader who started in April 2026 and makes £28,000 owes £4,011.80 for 2026/27 (£3,086 Income Tax and £925.80 Class 4). Because the bill is £1,000 or more and none of it was taxed at source, HMRC also asks for the first payment on account for 2027/28 on the same day, so 31 January 2028 needs £6,017.70, and 31 July 2028 another £2,005.90. Setting aside £501.48 a month during the first year covers the January payment.

Small side sales: expenses or the trading allowance

Sales of £14,000 with £600 of costs give a profit of £13,400 if you deduct the costs, and £13,000 if you claim the £1,000 trading allowance instead; you cannot do both. The allowance saves £104 here. From 6 April 2027 the allowance rises to £3,000; at 2026/27 rates the same sales would then cost £0, against £111.80 now. Once your costs are more than the allowance, deduct the costs.

£10,000 of profit: nothing to pay and a State Pension year

At £10,000 the bill is £0: the profit is under the £12,570 Personal Allowance and the Class 4 threshold. Because it is over £7,105, Class 2 is treated as paid, so the year still counts towards your State Pension without paying anything. You still have to file a return if your sales were over £1,000.

A good year at £110,000: the 62% slice

Going from £100,000 to £110,000 of profit adds £6,200 of Income Tax and Class 4, 62p of every extra pound: 40% Income Tax, another 20% because £5,000 of Personal Allowance is lost, and 2% Class 4. A personal pension contribution brings income back below £100,000 for this purpose; the calculator shows a contribution as money paid out and does not add that relief.

For a steady year the set-aside is simply the bill divided by 12: £334.32 a month on £28,000. The first year is the exception, because of the payment on account, and so is any year when profit rises sharply, because the payments on account are based on the previous, smaller bill and the difference arrives the following January.

Every figure here comes from the calculator above, using 2026/27 rates. Estimates for planning only, not tax advice.

Mistakes that change the bill

• Treating your own drawings as an expense. Money you take out for yourself is not a cost of the business; the tax is on the profit, however much of it you draw.
• Claiming the trading allowance and your actual expenses for the same business. It is one or the other each year.
• Budgeting for 31 January with this year's tax only. In the first year with a bill of £1,000 or more, January also asks for half of next year's estimate.
• Pricing work in the £100,000 to £125,140 band with the 40% rate. The real rate there is 62% until the Personal Allowance has gone.
• Adding Class 2 to the estimate. With profit of £7,105 or more it is treated as paid; below that it is optional.

What you keep from the next £1,000 of profit

The rate that matters when you price a job or decide whether to buy equipment is the tax on your next pound, not your average rate.

Between £100,000 and £125,140 you lose £1 of Personal Allowance for every £2 of income, so the rate is higher than in the band above.

Sole trader NI and tax — questions