Tax

Personal Finance Guide for the Self-Employed in the UK

April 2026 · 7 min read · QuidCast Guides

⚠️ Not financial advice. This guide is educational only. Investments can fall as well as rise. Always consult an FCA-authorised adviser before making financial decisions.

Quick answer

The UK's 4.2 million self-employed face extra complexity: income tax on profits (20% to £50,270, 40% above), Class 2 and Class 4 NI, Self Assessment deadlines, and no auto-enrolment pension. A core rule is to set aside 25–30% of earnings for tax in a separate account.

Around 4.2 million people are self-employed in the UK. The financial complexity is real — here's how to handle it.

Tax Rates

You pay income tax on profits at standard rates: 0% up to £12,570, 20% up to £50,270, 40% up to £125,140. Plus Class 2 NI (£3.45/week above £12,570) and Class 4 NI (9% on £12,570–£50,270).

Key TakeawaySet aside 25–30% of everything you earn for tax. Keep it in a separate account and don't touch it.

Allowable Expenses

Office costs and equipment
Vehicle mileage at HMRC approved rates
Marketing and professional subscriptions
Use of home as office (flat rate or proportion of bills)
Accountant fees

Self Assessment Deadlines

Register by 5 October in your second year of trading
Online return deadline: 31 January
Tax payments: 31 January and 31 July (payments on account)

Pension — The Biggest Mistake

Unlike employees, you're not auto-enrolled. A SIPP (Self-Invested Personal Pension) gives tax relief at your marginal rate. A basic-rate taxpayer only effectively pays £80 for a £100 pension contribution.

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Frequently asked questions

How much should the self-employed set aside for tax?

A common rule is 25–30% of everything you earn, kept in a separate account and untouched. This covers income tax plus Class 2 and Class 4 National Insurance when your Self Assessment bill is due.

What are the key Self Assessment deadlines?

Register by 5 October in your second year of trading, file your online return by 31 January, and make tax payments by 31 January and 31 July (payments on account).

What expenses can self-employed people claim?

Allowable expenses include office costs and equipment, vehicle mileage at HMRC rates, marketing and professional subscriptions, use of home as office, and accountant fees — all of which reduce the profit you are taxed on.