# UK income tax rates for tax year 2020/2021

• Last updated 26 Jan 2023

For tax year 2020/2021 the UK basic income tax rate was 20%. This increased to 40% for your earnings above £50,000 and to 45% for earnings over £150,000.

Your earnings below £12,500 were tax free. This is called the Personal Allowance. However for every £2 you earned over £100,000 this allowance is reduced by £1.

## How to calculate it

You can also use this calculator and select the 2020/2021 tax year so you can see how much income tax you should have paid.

I am
Annual self-employed income
£
Self-employed expenses
?
£

### Tax and profit

• Total earnings
£50,000
?
• Tax to pay
£9,472
£7,286 income tax
£0 class 2 National Insurance
£2,186 class 4 National Insurance
• What you’re left with
£40,528

## How your income tax is calculated

When you’re self-employed, you have to pay your income tax and national insurance contributions yourself in your annual Self Assessment. Our calculator helps you quickly assess how much you owe.

However you may be eligible for a tax refund when:

1. You already made tax payments for the year but your annual income ended up less than planned
2. You have done things that qualify for a tax relief (made private pension contributions, given to charity, etc.)

In your case when you earn £50,000:

### Income tax breakdown

You pay no income tax on first £12,570 that you make

You pay £7,286 at basic income tax rate (20%) on the next £36,430

### National insurance contributions breakdown

No contributions on the first £12,570 that you make

You pay £2,186 in contributions (at 6%) on the next £36,430 that you make

You pay £0 in NI Class 2 contributions

Tax bill amount £9,472
I want to pay by
Savings frequency

You need to save

£14.22 per day

to pay your £9,471.56 tax bill by 31/1/2026 which is in 666 days