Just joined the sole trader club? Then you’re probably wondering how much tax the self-employed pay – hopefully among other more exciting musings.
Keep reading for the key information on how to pay, what to pay and when to pay tax as a sole trader.
Before diving straight into how much the self-employed pay in taxes, it’ll help to understand what type of taxes the self-employed have to pay.
National Insurance rates in the 2025/26 tax year 👇
| NI class | Who pays? | How much? |
| Class 1 | Employees earning over £12,570 | 8% on earnings between £242 and £967 per week
2% if you earn £967+ per week |
| Class 1A/1B | Employers | 15% |
| Class 3 | Voluntary contributions | £17.75 per week |
| Class 4 | Self-employed earning over £12,570 | 6% on profits between £12,570-£50,270
2% on profits over £50,270 |
The self-employed pay their taxes through a Self Assessment tax return. This is an online or paper form that lets HMRC know how much income and profit you’ve earned throughout the year.
A tax return has to be filed annually unless you unregister for self-employment.
If you are newly self-employed, you have to fill in your Self Assessment tax return and pay tax by 31st January following the year that you started running your business.
In simpler terms, if you begun trading in May last year, you have to submit a Self Assessment in January next year.
In even simpler terms, check out this table with exact filing dates for the current tax year.
Key dates in the current 2025/26 tax year 👇
| Deadline | Date | Year |
| Tax year starts | 6th April | 2025 |
| Tax year ends | 5th April | 2026 |
| Register for self assessment | 5th October | 2026 |
| Pay tax bill by PAYE salary | 30th December | 2026 |
| Self assessment deadline | 31st January | 2027 |
And now. The moment we’ve all been waiting for! How much tax do the self-employed pay? 🥁
Well, sorry to disappoint, but there’s no set figure that all self-employed people pay. It depends totally on how much you earn each tax year. The more you earn, the more you pay. And if you earn less than what’s known as the personal allowance, you won’t be liable to pay either income tax or National Insurance.
The income tax rates in the 2025/26 tax year 👇
| Income | Tax rate | Tax band |
| Up to £12,570 | 0% | Personal allowance |
| £12,571 to £50,270 | 20% | Basic rate |
| £50,271 to £125,140 | 40% | Higher rate |
| over £125,141 | 45% | Additional rate |
Income tax rates for the self-employed are exactly the same as the rates paid employed people. But there is a difference. The self-employed only pay income tax on profits, not total earnings like salaried people.
Julietté is a self-employed (highly successful) pastry chef. 🧑🍳
She made a total of £150,000 for the year, but £12,000 of this was spent on bags of flour, so her profit is £138,000. She’ll be taxed on the £138,000, not the entire £150,000.
As Juliette’s income exceeds £125,140, she’s lost all of her £12,570 tax-free personal allowance. It reduces by £1 for every £2 she earns over £100,000.
Self-employed people can deduct what is called ‘allowable expenses’ from their taxable profit to reduce their tax bill. These are essential costs to run your business i.e, office equipment such as stationery and desks (in Juliette’s case, bags of flour).
Want to know what you can claim as a business expense? Find out here!
We know we said the self-employed file their taxes via paper or online, and it is true. But this is changing.
Soon(ish), you’ll no longer be able to use HMRC’s website to file your tax returns. Instead, you’ll have to keep and submit digital records of your earnings and expenses using MTD-compatible software. This will come into effect in 2026.
Want to know more about making tax digital? Read all about it here.
Manage your self-employed finances in one place with 10/10 bookkeeping tools.
Or see our Guides, Calculators or Taxopedia
