Back
Let us sort your Self Assessment today. Stress-free. For £119, all in. Learn more

The UK Personal Allowance: how does it work?

The Personal Allowance applies to all UK taxpayers. For the 2019/20 tax year it’s £12,500.

What can decrease your Personal Allowance

If you earn over £100,000:

  • it goes down by £1 for every £2 that your adjusted net income is above £100,000
  • this means that you lose this allowance entirely if your income is £125,000 or above.

However, you can reduce your adjusted net income by paying into private pensions and charity donations.

How much do I get?

Use this income tax calculator:

Annual self-employment income
£
Self-employment expenses
£
Select tax year
Income after tax
£37.9k
Income tax
£7.3k
NI
£3.8k
Total income tax
£7,300
£12,500 taxed at 0%
£36,500 taxed at 20% : £7,300
Total NI contributions
£3,789
Class 2 NI: £156
Class 4 NI at 9% : £3,633
What you’re left with
£37,911

How your income tax is calculated

As a self-employed you have to pay your income tax and national insurance contributions yourself during your annual self assessment. Our calculator helps you quickly assess how much payment is due.

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 smaller than planned
  2. You have done things that qualify for tax relief (made private pension contributions, give to charity, etc)

In your case when you earn £49,000:

Income tax breakdown

You pay no income tax on first £12,500 that you make

You pay £7,300 at basic income tax rate (20%) on the next £36,500

What can increase it

Depending on your situation you can add one (or both) of these allowances to it:

More guides & useful information

Let us sort your Self Assessment online. £119, all in.

That’s right. No matter how complicated it gets or why you need to do a return in the first place, it’ll cost £119 to get it done. That includes VAT, last-minute changes and all the support you may need.

How it works

1. Answer a few simple questions

And we mean a few. After a couple of minutes of answering questions online we’ll have everything we need to start working on your tax return.

2. Then get paired with a tax accountant

That’s right, you’ll be matched with a real accountant who is best suited to prepare your return. Plus, they’re on hand for questions whenever you need.

3. We file your Self Assessment for you

Once you’ve signed off your return, your TaxScouts accountant will file your return online with HMRC. That’s it! We told you it was simple.