UK freelancers pay Income Tax on profits above the £12,570 Personal Allowance. The basic rate is 20% (up to £50,270 total income), higher rate is 40% (up to £125,140), and additional rate is 45% above that. You also pay Class 2 National Insurance (£3.45/week if profits exceed £12,570) and Class 4 NI (6% on profits between £12,570–£50,270, then 2% above that). Use the calculator above to see your exact breakdown.
What expenses can I deduct as a freelancer?
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You can deduct expenses that are "wholly and exclusively" for business. Common deductions: office supplies, software subscriptions (Adobe, accounting tools), travel to client sites, professional development courses, marketing costs, professional insurance, accountancy fees, and a proportion of home office costs. HMRC allows a simplified £6/week (£312/year) home office deduction without receipts. Keep all receipts for at least 5 years.
Do I need to register for VAT?
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You must register for VAT if your taxable turnover exceeds £90,000 in any 12-month period (2025/26 threshold). You can voluntarily register below this threshold, which lets you reclaim VAT on purchases but means charging clients 20% VAT. The Flat Rate Scheme simplifies VAT by letting you pay a fixed percentage of turnover (varies by trade, typically 10-16.5%).
When do I need to pay my tax bill?
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For the 2025/26 tax year (6 April 2025 – 5 April 2026): file your Self Assessment online by 31 January 2027 and pay any tax owed by the same date. If your tax bill exceeds £1,000, HMRC will also require payments on account — two advance payments of 50% each, due 31 January and 31 July. You can reduce payments on account if you expect lower income next year.
Is this calculator accurate?
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This calculator uses official 2025/26 HMRC tax rates, NI thresholds, and student loan repayment rates. It provides a good estimate for most sole traders and freelancers. It does not account for marriage allowance transfers, blind person's allowance, tax code adjustments, or complex dividend/rental income scenarios. For exact figures, consult a qualified accountant or use HMRC's own Self Assessment tools.
How to Use This Freelance Tax Calculator
Enter your total annual gross income — that's everything clients pay you before deducting expenses. Then enter your allowable business expenses (software, travel, equipment, home office costs). The calculator works out your taxable profit and shows exactly how much you'll owe in Income Tax, Class 2 NI, and Class 4 NI.
If you have other income (employment, rental, dividends), add it in the "Other Taxable Income" field — this affects which tax band your freelance profits fall into. Pension contributions reduce your taxable income, so include those too.