Tag: National Insurance
How much tax does a sole trader pay in the UK?
Short answer: you pay Income Tax and National Insurance on your profit, not on your turnover. Profit is your self-employed income minus your allowable expenses. For the 2026 to 2027 tax year, the first £12,570 of income is tax-free for most people. Above that you pay 20% Income Tax up to £50,270, then 40%. Class 4 National Insurance is 6% on profits between £12,570 and £50,270, then 2%. Cited to GOV.UK, checked 20 October 2026.