Tax set-aside calculator
The monthly set-aside figure tells you exactly how much of each month's profit to move into a separate account for HMRC. Enter profit after expenses, not turnover.
Updated for 2026/27. Uses UK tax bands and HMRC/GOV.UK guidance. Estimates only — not tax advice.
Calculator checked against GOV.UK and HMRC rules on (how we check).
Calculate sole trader tax Read the guidesFree check · 2026/27
Turn this into a dated payment plan
See your 2026/27 bill, every payment with its date and amount, and what to set aside each month.
Your Self Assessment payment timeline
Based on your estimated bill of £8,431.80 for 2026/27, here is when HMRC expects payment — and why your first January bill can feel much bigger than the tax itself. Estimate only — your exact HMRC figures may differ.
ends 5 Apr 31 Jan 31 Jul Next
31 Jan
Building your monthly tax reserve
The most effective way to handle Self Assessment is never to let the tax money mix with your spending account. As soon as income arrives, a fixed amount goes into a separate account you do not touch. This calculator tells you what that fixed monthly amount should be.
The monthly set-aside is calculated by dividing your estimated annual income tax and Class 4 NI by 12. If you have a student loan or pension, those are factored in too. The quarterly figure is the same total split into four chunks.
- Move the set-aside to a separate savings account on the day income arrives.
- Review quarterly — if your profit has changed materially, recalculate and adjust the amount.
- The quarterly reserve figure is a savings estimate, not an HMRC payment — a useful trigger for January and July payment-on-account planning.
- First year warning: with no payments on account yet, your first 31 January bill is the whole year-one bill plus the first payment on account for year two — up to 150% of a year's tax on one date — so reserve extra before then.
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.
What share of each payment to put aside
There are two ways to decide how much of each payment to move into a tax account. The simple one is your average rate for the year: estimate the year's profit, work out the bill and divide by 12. The more careful one is the rate on the next pound you earn, which is higher than the average once you are past the Personal Allowance, because the first £12,570 is tax-free.
The average works well when income is steady and your estimate is good. The rate on the next pound is safer when income is lumpy or rising: if a big job arrives late in the year, the tax on it is at your top rate, not your average. Either way, set aside from profit, not from turnover: the part of an invoice that pays for materials or other costs is not taxed.
Average rate and the rate on your next £2,000 invoice
| Yearly profit | Average set-aside | Rate on extra profit | Put aside from a £2,000 invoice |
|---|---|---|---|
| £15,000 | 4.2% | 26% | £520 |
| £25,000 | 12.9% | 26% | £520 |
| £40,000 | 17.8% | 26% | £520 |
| £55,000 | 21.4% | 42% | £840 |
| £80,000 | 27.9% | 42% | £840 |
| £110,000 | 33.5% | 62% | £1,240 |
2026/27, England, Wales or Northern Ireland, no other income, student loan or pension. The invoice is assumed to be all profit.
Your first year: if you start trading on 6 April 2026 and make £36,000 profit, the Income Tax and Class 4 NI come to £6,091.80. Because payments on account start in your first January, 31 January 2028 asks for £9,137.70: the bill plus half of it again. Saving that over the 22 months from April 2026 to January 2028 means about £415 a month, and another £3,045.90 is due in July 2028.
With a Plan 2 student loan the same profit adds £595.35 of repayment, paid in January with the balancing payment, so the monthly set-aside rises from £507.65 to £557.26.
Every figure here comes from the calculator above, using 2026/27 rates. Estimates for planning only, not tax advice.
Set-aside pitfalls
- Setting aside from turnover after costs have been paid from it. Work from profit, or from the profit share of each invoice.
- Keeping the tax money in your everyday account. A separate account you do not spend from is the whole point.
- Not revisiting the figure. If profit is running ahead of your estimate by the autumn, raise the monthly amount then, not in January.
- Forgetting VAT. If you are VAT-registered, that money goes in a separate pot again; it is not part of your Income Tax bill.
How much tax to put aside at each profit level
Divide the year's estimated bill by 12 or by 4. The percentage is the share of each pound of profit to move into a separate account.
| Yearly profit | Tax and NI | Set aside | A month | A quarter |
|---|---|---|---|---|
| £20,000 | £1,932 | 9.7% | £161 | £483 |
| £30,000 | £4,532 | 15.1% | £378 | £1,133 |
| £40,000 | £7,132 | 17.8% | £594 | £1,783 |
| £50,000 | £9,732 | 19.5% | £811 | £2,433 |
| £75,000 | £20,189 | 26.9% | £1,682 | £5,047 |
| £100,000 | £30,689 | 30.7% | £2,557 | £7,672 |
Your first bill can be up to 150% of this, because a payment on account for the next year may fall due at the same time.
Tax reserve — common questions
What percentage of income should I set aside for tax?
Where should I keep my tax reserve?
Do I need to set aside more than the income tax estimate?
Where to go next
Official sources for this page
Calculator and worked examples checked against GOV.UK and HMRC rules on 3 November 2026.
Thinking of going limited? Compare first: with 2026/27 rates, a sole trader who takes all the profit out usually keeps more. If you already run a company, the Director's Pay & Tax Pack (£4.99) covers salary versus dividends, the director's loan account and year-end planning for 2026/27.