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Updated for 2026/27

Sole Trader Tax Calculator

Find out exactly how much you can keep. Enter your freelance income and calculate your HMRC tax bill in real-time.

Your Details

£

Everything your clients paid you, before costs.

£

Software, travel, equipment directly related to work.

£

Entering this accurately models if your side hustle pushes you into the higher 40% tax bracket.

Tax Breakdown

Hustle Profit£23,000
Income Tax - £0
National Insurance (Class 4) - £626

Your Total Tax Bill

£626

Safe to Spend

£22,374

Effective Rate

2.7%

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How is my tax calculated?

As a sole trader in the UK, your tax bill is calculated based on your total Profit (Revenue minus Allowable Expenses). You are subjected to two primary taxes: Income Tax and National Insurance (NI).

In Plain English

What is "The Missing Class 2 NI"?

Good news! As of April 2024, the government abolished Class 2 National Insurance for anybody earning over £12,570. You now only pay Class 4 NI on your main profits.

2026/2027 Tax Bands

  • Personal Allowance: 0% on the first £12,570.
  • Basic Rate: 20% on profit between £12,571 and £50,270.
  • Higher Rate: 40% on profit from £50,271 to £125,140.

Sole Trader Tax FAQs

Yes. HMRC looks at your total combined income. If your PAYE day job eats up your entire £12,570 Personal Allowance, your sole trader profit will be taxed entirely at 20% or 40% from the very first penny.
Things you buy strictly for your business: software subscriptions, train tickets to clients, specific tools, and a proportion of your home internet if you work from home.
The absolute deadline for paying your online Self Assessment tax bill is midnight on 31 January following the end of the tax year.