I just went self-employed — what tax do I pay?

What changes for you

1. Nobody deducts your tax any more

   There is no PAYE. You work out what you owe, and you pay it in one or two lumps a year. The first bill is often the largest single tax payment people have ever made, because it can include a year of tax plus a payment on account.

2. Your first £1,000 may not need reporting at all

   The trading allowance exempts £1,000 of gross trading income. Above it you can deduct the £1,000 instead of your expenses, whichever is larger — a genuine choice, not a formality.

3. You pay Class 4 National Insurance on profits

   6% between the lower and upper profit limits and 2% above, on top of income tax. Class 2 is now treated as paid where profits exceed the small profits threshold, which protects your State Pension record.

4. Payments on account arrive without warning

   If your bill exceeds £1,000, HMRC asks for half of it again in January and another half in July, towards next year. The first January is therefore 150% of the bill you were expecting.

5. Making Tax Digital is coming for you

   From April 2026, quarterly digital reporting applies to self-employment and property income above £50,000, dropping to £30,000 in 2027 and £20,000 in 2028.

The decisions this opens up

Each works on your own figures and shows every option with the workings. Free, and no sign-up.

Dates this puts in your diary

• 5 October after the tax year you startedRegister for Self Assessment
• 31 January after the tax yearFile the return and pay the balance, plus the first payment on account
• 31 JulySecond payment on account

Run the numbers