UK Sole Trader Tax Calculator 2026/27
Work out exactly how much Income Tax and National Insurance you'll pay as a self-employed sole trader in the 2026/27 tax year. Includes Class 2 & Class 4 NICs, Personal Allowance taper, and optional Student Loan repayments.
Your Income Details
National Insurance
Student Loan (optional)
Your Tax Breakdown
2026/27 UK Income Tax Rates & Bands for Sole Traders
The table below shows the Income Tax rates that apply to your total taxable income (profits + any other income) for the tax year running 6 April 2026 to 5 April 2027. The Personal Allowance of £12,570 is frozen until April 2028.
| Band | Taxable Income | Tax Rate | Applies To |
|---|---|---|---|
| Personal Allowance | Up to £12,570 | 0% | Everyone (tapers above £100k) |
| Basic Rate | £12,571 to £50,270 | 20% | Most sole traders |
| Higher Rate | £50,271 to £125,140 | 40% | Higher-earning self-employed |
| Additional Rate | Over £125,140 | 45% | Top earners |
Self-Employed National Insurance 2026/27
Unlike employees who pay Class 1 NICs through PAYE, sole traders pay Class 2 and Class 4 National Insurance contributions based on their annual profits:
- Class 2: £3.45 per week (£179.40/year) if profits exceed the Small Profits Threshold (£6,725).
- Class 4: 6% on profits between £12,570 and £50,270; 2% on profits above £50,270.
Class 2 contributions build your entitlement to the State Pension and certain benefits, so even though they are a flat weekly rate, they provide valuable cover.
How the Calculator Works
Our sole trader tax calculator follows HMRC's Self Assessment logic step-by-step:
- Profit calculation: Turnover minus allowable expenses = taxable profit.
- Income stacking: Any PAYE or other income is added to your profit to give total income.
- Personal Allowance check: If your total income exceeds £100,000, your allowance tapers by £1 for every £2 earned, disappearing completely at £125,140.
- Income Tax bands: The remaining income is taxed at 20%, 40% or 45% depending on which band it falls into.
- NICs: Class 4 is calculated purely on profit; Class 2 is a flat annual charge if profits are high enough.
- Student Loan: If selected, repayments are 9% (6% for postgraduate) on income above your plan threshold.
The result is your estimated take-home pay — the money you actually keep after HMRC takes its share. Use this figure to plan your savings, pension contributions, and quarterly Payments on Account.
Frequently Asked Questions
How much tax does a sole trader pay in the UK?
A sole trader pays Income Tax on profits above the Personal Allowance (£12,570), plus Class 2 and Class 4 National Insurance. The effective tax rate varies: at £30,000 profit it is roughly 18–20%; at £60,000 it rises to roughly 30–32% because you enter the Higher Rate band.
What is the difference between Class 2 and Class 4 NICs?
Class 2 is a flat weekly rate (£3.45) paid if your profits are above £6,725. It counts towards benefits. Class 4 is a percentage of your profits (6% or 2%) and does not count towards benefits — it is purely a tax on earnings.
Do I need to register for VAT as a sole trader?
You must register for VAT if your taxable turnover exceeds the VAT threshold (£85,000 for 2026/27). You can also register voluntarily if it benefits your business (e.g., to reclaim VAT on expenses).
When is the Self Assessment deadline?
Online tax returns for the 2026/27 tax year must be submitted by 31 January 2028. Any tax owed is also due by that date. If your bill is over £1,000, you usually make Payments on Account on 31 January and 31 July.
Can I deduct pension contributions from my tax bill?
Yes. Contributions to a personal pension extend your Basic Rate band, meaning you get tax relief at your highest marginal rate. This calculator does not include pension inputs, but you can roughly estimate relief by reducing your taxable profit figure.