Reviewed by Mustafa Bilgic
Founder, WebCalculator
Sole-trader tax, Class 4 NI and the trading allowance follow HMRC for 2026/27. Self Assessment can be complex — consider an accountant. Estimates only, not tax advice.
Freelancing on the side or full time? Enter your income and costs to see your Income Tax, Class 4 NI and take-home — with the £1,000 trading allowance applied automatically and a clear quarterly set-aside figure.
Income Tax + Class 4 NI
As a freelancer you're taxed as a sole trader on your profit — income minus allowable expenses. You pay Income Tax at the usual bands and Class 4 National Insurance, all declared through Self Assessment. If your costs are tiny, the £1,000 trading allowance can beat claiming actual expenses, and income under £1,000 is tax-free with nothing to report.
| Profit band | Income Tax | Class 4 NI |
|---|---|---|
| Up to £12,570 | 0% | 0% |
| £12,570–£50,270 | 20% | 6% |
| £50,270–£125,140 | 40% | 2% |
| Over £125,140 | 45% | 2% |
The freelancer's classic mistake is spending money HMRC will later want. Put 25–30% of each payment aside (more if you're higher-rate), and remember payments on account can make your first January bill larger. For a deeper breakdown see the self-employed tax calculator, and if you invoice for VAT, the VAT calculator.
Income Tax at 20%/40%/45% on profit plus Class 4 NI at 6%/2%. The first £12,570 is covered by the Personal Allowance (if not used elsewhere).
You can earn £1,000 of freelance income tax-free, or deduct £1,000 flat instead of actual expenses when your costs are lower.
Around 25–30% of profit, more on higher-rate earnings, plus a buffer for payments on account.
Yes, once your freelance income exceeds £1,000 in a tax year — register by 5 October after that year ends.