NOTE: this guide has been updated for the 2019/2020 tax year.
Self-employed have to pay the same taxes as regular employees: income tax and National Insurance contributions.
However, the way you pay is different.
Is the same as for regular employees: £12,500 in the 2019/20 tax year.
If you have two jobs and one is self-employed, make sure that your personal allowance is applied to the one where you make the most money.
Just look at the tax code:
Unlike for employees, when you’re self-employed you pay income tax on your profits only, not your total income.
To calculate your profits deduct your claimable expenses from your self-employed income.
Then simply multiply by the tax rate:
|between £0 and £12,500||0%|
|between £12,501 and £50,000||20%|
|between £50,001 to £150,000||40%|
Here is a self-employed income tax calculator if you want to know how much you have to pay.
As a self-employed, you need to pay:
Check out our article about the NIC that sole traders have to pay.
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At TaxScouts we appreciate that tax returns are highly individual. Before you get assigned an accountant we make sure to understand your circumstances and help you build your optimal tax profile.