Best Tax Set-Aside Calculator UK (2026)

Updated July 2026 · Independent comparison, not sponsored

Full accounting platforms like FreeAgent and GoSimpleTax calculate a running tax estimate as part of a much bigger toolset, but usually require a subscription or a specific bank account to access for free. A spreadsheet works but takes manual upkeep. PayToolkit's Tax Set-Aside Calculator gives you the same core number — instantly, with no signup — and links directly into the free Tax Dashboard if you want it tracked automatically as you log income and expenses.

How much to set aside for tax: worked examples

The usual rule of thumb is to put 20% to 30% of your profit aside, but the right figure depends on how much you make. The table shows the 2026/27 Income Tax and Class 4 National Insurance on a sole trader's annual profit, assuming no other income, the standard £12,570 Personal Allowance, Class 4 NIC at 6% between £12,570 and £50,270 and 2% above, and no student loan.

Profit is turnover minus allowable business expenses, so your set-aside figure should be based on profit rather than invoices. If you use the £1,000 trading allowance instead of claiming expenses, only income above £1,000 is taxed. Class 2 National Insurance is no longer compulsory, but if your profit is above the small profits threshold you still build qualifying years for the State Pension.

Payments on account catch out new sole traders

In your first year of self-employment, the 31 January deadline can bring two bills at once. On profit of £30,000 the tax and Class 4 NIC come to £4,532. HMRC also asks for a first payment on account of half of that, £2,266, towards next year's bill, so the January payment is £6,798. A second payment on account of £2,266 is due on 31 July, and a balancing payment follows the next January if your profit has changed. Payments on account are not required if your last bill was under £1,000 or if more than 80% was already collected through PAYE. This is the main reason many people feel they have set aside enough and still come up short, so a calculator that includes payments on account gives a more realistic target.

Practical ways to set money aside

Open a separate savings account for tax and move a fixed percentage of each payment into it as soon as the money arrives. Set the percentage from the table above, then add 9% of earnings over the threshold if you have a student loan. Review the figure after your first year, when you will have a real bill to compare with. Keep the money in an easy-access account so it earns interest while it waits, and remember that interest above your Personal Savings Allowance is itself taxable.

This table is general information based on England, Wales and Northern Ireland rates and a single source of income; Scottish taxpayers pay different Income Tax rates. Use our self-employed tax calculator or sole trader tax calculator to model your own figures.

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