Self-Employed
Self-Employed Tax UK: What You Actually Owe
A sole trader pays Income Tax and Class 4 National Insurance on profits. Your marginal rate in the basic-rate band is not 20% but 26%: 20% Income Tax plus 6% Class 4 NIC. The first GBP 12,570 of profit is tax-free under the Personal Allowance.
1
Profit for the year - GBP 45,000
2
Less Personal Allowance (tax-free) - - GBP 12,570
3
Income taxed at basic rate (20%) - GBP 32,430
4
Income Tax due - GBP 6,486.00
5
Plus 5 more in the full guide
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