Self Employment Tax Calculator UK

A self employment tax calculator takes into account the complexities of the UK tax system, including income tax bands, personal allowances, and the various classes of National Insurance contributions that self-employed individuals must pay. By inputting your business income, expenses, and other relevant details, you can get a clear picture of how much you need to set aside for tax and when these payments are due. This helps you budget effectively throughout the tax year and ensures you maintain healthy cash flow for your business.

Understanding your tax liability as a self-employed person goes beyond just calculating income tax. For the 2023/24 tax year, you’ll need to consider both Class 2 National Insurance contributions (a flat rate of £3.45 per week if your profits exceed £12,570) and Class 4 contributions (9% on profits between £12,570 and £50,270, and 2% on profits above £50,270). Your profits – which are your income minus allowable business expenses – determine how much tax you’ll pay. For example, if your annual profit is £35,000, you’ll pay 20% income tax on earnings above the personal allowance, plus the relevant National Insurance contributions. The calculator also helps you understand how expenses and allowances can reduce your taxable profit, potentially saving you thousands of pounds in tax. Additionally, it can help you prepare for payments on account – the advance payments towards your next year’s tax bill that HMRC requires if your tax bill exceeds £1,000.