Self-employed tax for tradesmen: how much you pay on your profit
Income Tax and Class 4 National Insurance on £30,000 and £45,000 profit, worked line by line, plus the dates.
General information, not tax or legal advice. Rules change. Check GOV.UK and ask your accountant.
You pay Income Tax and National Insurance on your profit, not on what you invoice. Profit is your income minus your allowable costs. On £30,000 profit, the examples below come to about 15% in tax and National Insurance. On £45,000 profit, about 19%. This is general information, so check with your accountant for your own case.
Tax is on profit, not turnover
GOV.UK says taxable profit is your business income minus your allowable expenses. Its example: £40,000 turnover and £10,000 of allowable expenses means you are taxed on £30,000. Money you take out for personal use is not an allowable expense.
So a joiner who invoices £52,000 and has £14,000 of van, tools and materials costs is taxed on £38,000, not £52,000.
Income Tax rates
These are the rates GOV.UK shows on 11 November 2026. It names the current tax year as 6 April 2026 to 5 April 2027.
| Band | Income | Rate |
|---|---|---|
| Personal Allowance | Up to £12,570 | 0% |
| Basic rate | £12,571 to £50,270 | 20% |
| Higher rate | £50,271 to £125,140 | 40% |
| Additional rate | Over £125,140 | 45% |
GOV.UK also says the Personal Allowance goes down by £1 for every £2 of income above £100,000. Neither example is near that.
Scotland has different Income Tax bands. See Income Tax in Scotland. No Scottish figures are in this guide.
Self-employed National Insurance
GOV.UK's page for tax year 2026 to 2027 gives two classes.
- Class 4: you pay it if profits are over £12,570 a year. It is 6% on profits from £12,570 up to £50,270, and 2% on profits over £50,270.
- Class 2: if profits are £7,105 or more a year, GOV.UK says Class 2 contributions are "treated as having been paid" to protect your National Insurance record. You pay nothing. Under £7,105 you do not have to pay, but you can choose to pay voluntary Class 2. GOV.UK gives that rate as £3.65 a week.
Two worked examples
Assumptions: England, profit is the only income, no student loan, standard Personal Allowance. No limited company, dividends or pension relief.
| Line | £30,000 profit | £45,000 profit |
|---|---|---|
| Profit | £30,000.00 | £45,000.00 |
| Personal Allowance | £12,570.00 | £12,570.00 |
| Taxable income (profit minus allowance) | £17,430.00 | £32,430.00 |
| Income Tax at 20% | £3,486.00 | £6,486.00 |
| Class 4 NI at 6% of the same amount | £1,045.80 | £1,945.80 |
| Class 2 NI | £0.00 | £0.00 |
| Total tax and NI | £4,531.80 | £8,431.80 |
| Left from profit | £25,468.20 | £36,568.20 |
Both profits sit below £50,270, so only the 20% rate and the 6% Class 4 rate are used.
When you pay: payments on account
GOV.UK describes payments on account as advance payments towards your next Self Assessment bill, including Class 4 National Insurance. They are usually two payments, each half of last year's bill. Both are due by midnight on 31 January and 31 July.
Most people must make them. You do not if last year's bill was under £1,000, or if you paid more than 80% of it outside Self Assessment.
Using the £45,000 case: last year's bill was £8,431.80, so each payment on account is £4,215.90. If you earn more than that estimate, you may owe a balancing payment by the next 31 January. If you earn less, you can ask HMRC to reduce the payments, or you may be able to claim a refund. Ask for a reduction only if you expect a lower bill, because GOV.UK says you will be charged interest on any shortfall.
Key dates
GOV.UK shows these for the 2025 to 2026 tax year. Check the deadlines page for the year you are in.
- Register: tell HMRC by 5 October 2026 if you need to complete a return for the previous tax year. Telling HMRC after that date could lead to a penalty. Register for Self Assessment.
- Online return: by 11:59pm on 31 January 2027.
- Payment: by 11:59pm on 31 January 2027.
A simple put-aside habit
From the two examples, tax and National Insurance took about 15% of profit on £30,000 and about 19% of profit on £45,000. One simple habit is to move that share of your profit into a separate account. These are example percentages from this page only, not advice. Your own figure depends on your profit and your costs, so ask your accountant.
Making Tax Digital for Income Tax
GOV.UK says you need to use it if your qualifying income is above a threshold: over £50,000 for 2024 to 2025 (use from 6 April 2026), over £30,000 for 2025 to 2026 (from 6 April 2027), and over £20,000 for 2026 to 2027 (from 6 April 2028). Qualifying income is the amount before expenses, so it is turnover. Read Find out if and when you need to use it.
Related
If a contractor deducts tax under CIS, read CIS registration. To work back from the take-home pay you want to the day rate you need, use the day rate calculator.