If you are a sole trader, you pay Income Tax and Class 4 National Insurance on your profit (income minus allowable expenses). This estimates both for 2025/26: standard Income Tax bands after the £12,570 personal allowance, plus Class 4 NI at 6 percent on profit between £12,570 and £50,270 and 2 percent above. Set money aside for it as you earn — HMRC bills it via Self Assessment.
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Frequently asked questions
What about payments on account?
HMRC often asks you to pay half of next year's expected bill in advance, in two instalments. This tool shows the tax on the profit itself, not the payment-on-account timing.
Are expenses included?
Enter your profit — that is income after allowable business expenses. Claiming all legitimate expenses lowers the profit and therefore the tax.