MoneyHelper
Tax and National Insurance when you're Self-Employed
Comprehensive guide on tax and national insurance for self-employed individuals by MoneyHelper.
Income Tax is a tax you pay on your income, including money from self-employment.
When you’re self-employed (registered as a sole-trader with HMRC), you’ll be paying income tax on the profits you earn, after your expenses.
There are different levels of tax you’ll be required to pay, depending on the level of your income, and there are tax free thresholds too.
When you’re employed, your income tax is generally calculated and deducted by your employer.
When you’re self-employed, you’ll need to calculate how much tax you are due to pay, and pay it to HMRC yourself, via a “Self Assessment Tax Return”, which tells the government how much you earned and owe in tax.
Tax can be complex, so we generally recommend finding an accountant to help you - but you should still aim to understand what tax you are paying, how much you should be putting aside, and make sure you pay your tax on time.
Many freelancers start self-employment without being aware of what they need to put aside for tax and national insurance. Don’t make that mistake. Read the guides linked below or speak to an accountant for support.