Back to Blog
How Much Tax Do I Pay as a UK Sole Trader?
By Remus Pantea · 12 June 2026
As a sole trader, you pay two types of tax on your profits: Income Tax and National Insurance. Your profit is your total income minus allowable business expenses. The more expenses you claim, the less tax you pay.
2026/27 Tax Calculator
Enter your numbers below for an instant breakdown.
Taxable Profit
Personal Allowance
Income Tax
Class 2 NI (£3.45/week)
Class 4 NI (6% / 2%)
Total Tax & NI
Effective Tax Rate
Take-Home Pay
Based on 2026/27 tax rates. Personal Allowance tapers above £100,000. Does not include student loan repayments or payments on account.
Income Tax Bands 2026/27
| Band | Taxable Income | Rate |
|---|---|---|
| Personal Allowance | Up to £12,570 | 0% |
| Basic rate | £12,571 – £50,270 | 20% |
| Higher rate | £50,271 – £125,140 | 40% |
| Additional rate | Over £125,140 | 45% |
Personal Allowance taper: If your profit exceeds £100,000, your Personal Allowance is reduced by £1 for every £2 above £100,000. At £125,140, it reaches zero.
National Insurance
Sole traders pay two classes of National Insurance:
- Class 2: £3.45 per week (£179.40/year) if profits are above £12,570
- Class 4: 6% on profits between £12,570 and £50,270, plus 2% on profits above £50,270