What does the Sole Trader Tax Calculator do?

Calculate income tax, Class 2 and Class 4 NI for sole traders and self-employed individuals. All calculations are performed in your browser using official UK rates and thresholds.

Is this suitable for my business?

This calculator provides general estimates based on standard UK business rates and rules. Every business is different — consult your accountant for advice specific to your circumstances.

Does this use 2025/26 tax rates?

Yes. All rates and thresholds are based on the current 2025/26 UK tax year. Corporation Tax main rate is 25% for profits over £250,000, with a 19% small profits rate.

Sole Trader Tax Calculator 2025-26

Calculate income tax, Class 2 and Class 4 NI for sole traders and self-employed individuals.

Last updated: April 2026 · Source: GOV.UK – Income Tax Rates

Total Revenue / Turnover

Allowable Expenses

Disclaimer

This calculator is provided for informational purposes only and should not be considered as financial or tax advice. All calculations are performed locally in your browser — no personal data is collected or sent to our servers. Rates and thresholds are sourced from HMRC and GOV.UK and are updated for the current tax year. Always verify results with HMRC or consult a qualified professional before making financial decisions.

How It Works

Sole trader profits are taxed as personal income through the Self Assessment system. Your taxable profit is calculated as total business income minus allowable business expenses (materials, travel, insurance, professional fees, a proportion of home costs if you work from home, and capital allowances on equipment). This net profit figure is then combined with any other income to determine your total taxable income for the year.

Income Tax is charged in bands after deducting the £12,570 Personal Allowance: 20% basic rate on income from £12,571 to £50,270, 40% higher rate from £50,271 to £125,140, and 45% additional rate above £125,140. The Personal Allowance reduces by £1 for every £2 earned above £100,000, creating an effective 60% marginal rate between £100,000 and £125,140. Tax is paid in two Payments on Account (January and July) plus a balancing payment in the following January.

National Insurance adds a further layer: Class 2 contributions are £3.45 per week (£179.40 per year) when profits exceed the Small Profits Threshold of £6,725. Class 4 contributions are 6% on profits between £12,570 and £50,270, then 2% on profits above £50,270. Both classes are collected through Self Assessment. Sole traders may also claim the £1,000 trading allowance instead of actual expenses if their total trading income is low, which exempts the first £1,000 from tax entirely.

Tax bill on £55,000 sole trader profit

Net profit after expenses: £55,000.
Income Tax: £0 on first £12,570. £37,700 × 20% = £7,540. £4,730 × 40% = £1,892. Total IT: £9,432.
Class 2 NI: £3.45 × 52 = £179.40.
Class 4 NI: (£50,270 − £12,570) × 6% = £2,262. (£55,000 − £50,270) × 2% = £94.60.
Total tax and NI: £9,432 + £179.40 + £2,262 + £94.60 = £11,968. Take-home: £43,032.

Source: GOV.UK – Income Tax Rates

Frequently Asked Questions

What does the Sole Trader Tax Calculator do?: Calculate income tax, Class 2 and Class 4 NI for sole traders and self-employed individuals. All calculations are performed in your browser using official UK rates and thresholds.
Is this suitable for my business?: This calculator provides general estimates based on standard UK business rates and rules. Every business is different — consult your accountant for advice specific to your circumstances.
Does this use 2025/26 tax rates?: Yes. All rates and thresholds are based on the current 2025/26 UK tax year. Corporation Tax main rate is 25% for profits over £250,000, with a 19% small profits rate.