Free Tool — 2026/27 UK Tax Year
Enter your income and expenses to see your tax bill and take-home pay.
Enter your income to see your results
As a self-employed person, HMRC does not tax everything you earn. They tax your taxable profit, which is your total income minus the money you spent on running your business.
Business expenses reduce your taxable profit, which directly lowers your tax bill. This is why keeping accurate records of what you spend on your work matters. Missed expenses means paying more tax than you need to.
Allowable expenses include things like tools, equipment, phone bills, travel costs, professional subscriptions, and a proportion of home costs if you work from home. HMRC publishes a full list of what counts.
A simple example
HMRC calculates your tax based on £32,000, not the full £40,000 you earned. The £8,000 of legitimate expenses saves you money.
As a self-employed person you have two separate tax bills to think about.
Income Tax
The UK uses a banded system. The first slice of your profit up to the Personal Allowance (£12,570) is tax-free, and only the amount above that is taxed at the rate for that band.
£0 to £12,570
Personal Allowance
£12,571 to £50,270
Basic rate
£50,271 to £125,140
Higher rate
Above £125,140
Additional rate
National Insurance
Self-employed people pay Class 4 NI on profits. Class 2 NI was scrapped in April 2024, so there is only one rate to worry about now.
£0 to £12,570
Below threshold
£12,571 to £50,270
Class 4
Above £50,270
Class 4 upper rate
Class 1 NI applies to employees, not the self-employed.
Employees have their tax deducted automatically before they receive their wages. As a self-employed person, that does not happen. Instead, you tell HMRC what you earned each year by filing a Self Assessment tax return.
You need to register for Self Assessment if you earned more than £1,000 from self-employment in a tax year. If you have not registered yet, you can do it on the HMRC website. It takes about 10 minutes and HMRC will send you a Unique Taxpayer Reference (UTR) number in the post.
The UK tax year runs from 6 April to 5 April. The 2026/27 tax year ends on 5 April 2027.
Register with HMRC
By 5 October 2027
Only needed if this is your first year being self-employed
File your tax return online
By 31 January 2028
Covers the 2026/27 tax year
Pay your tax bill
By 31 January 2028
If your bill exceeds £1,000, you may also owe a payment on account in July
Making Tax Digital (MTD) is a government programme that changes how self-employed people report their income to HMRC. Instead of one annual tax return, you will send four quarterly updates using approved software, plus a final summary at the end of the year.
The first phase is already active. Since April 2026, self-employed people and landlords with income over £50,000 per year have been required to use MTD-compatible software. The idea is to spread the work across the year rather than scrambling to find a year's worth of receipts every January.
From April 2026
Now in forceSelf-employed people and landlords with income over £50,000 per year must use MTD-compatible software for their quarterly updates.
From April 2027
Next phaseThe threshold drops to income over £30,000 per year, bringing more self-employed people into scope.
Outlays — free to start
Outlays scans and categorises every receipt automatically — so at tax time you know exactly what you can claim and your bill is as low as it should be.