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Work out your tax for 2026 to 2027
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Enter your takings for the year to see the tax.
How it's worked out
As a sole trader you pay tax on your profit: what customers paid you, minus your allowable business expenses. On that profit you pay two things through Self Assessment.
| Profit | Income Tax | Class 4 National Insurance |
|---|---|---|
| Up to £12,570 | 0% | 0% |
| £12,571 to £50,270 | 20% | 6% |
| £50,271 to £125,140 | 40% | 2% |
| Over £125,140 | 45% | 2% |
The £12,570 tax-free Personal Allowance goes down by £1 for every £2 of income over £100,000, so it's gone at £125,140. Class 2 National Insurance is treated as paid once your profit is £7,105 or more, so there's nothing to add for it.
A made-up example
A plumber takes £48,000 in the 2026 to 2027 tax year and spends £9,500 on the van, materials, tools and insurance.
- Profit: £48,000 − £9,500 = £38,500
- Income Tax: 20% of (£38,500 − £12,570) = 20% of £25,930 = £5,186
- Class 4 National Insurance: 6% of £25,930 = £1,555.80
- Tax and National Insurance: £6,741.80, about £562 a month, or £14.05 of every £100 customers pay
Put that aside as the money comes in, in a separate account, and the January bill is never a shock.
When you pay it
The tax for 2026 to 2027 is due by 31 January 2028. Once your bill is more than £1,000, HMRC also asks for payments on account: two advance payments towards the next year, each half of this year's bill, due on 31 January and 31 July.
- The first year hurts: in the example, 31 January 2028 takes the year's £6,741.80 plus a first payment on account of £3,370.90, so £10,112.70, then another £3,370.90 by 31 July 2028.
- After that it evens out: each January you pay whatever the payments on account didn't cover, plus the first half for the next year.
- No payments on account if last year's bill was under £1,000, or more than 80% of your tax was taken before it reached you, for example through PAYE on a job.
If your profit drops, you can ask HMRC to reduce your payments on account. Source: GOV.UK, payments on account.
Making Tax Digital for Income Tax
Sole traders now have to keep digital records and send HMRC a summary every three months through compatible software, once their qualifying income is over a threshold. Qualifying income is your self-employed and property income added together, before expenses.
| Qualifying income over | In the tax year | Start using it from |
|---|---|---|
| £50,000 | 2024 to 2025 | 6 April 2026 |
| £30,000 | 2025 to 2026 | 6 April 2027 |
| £20,000 | 2026 to 2027 | 6 April 2028 |
The quarterly updates are due by 7 August, 7 November, 7 February and 7 May, each covering the tax year so far. They're summaries, not tax returns: you still finish the year with a tax return by 31 January. HMRC writes to you when you need to start, and some people can be exempt. The Making Tax Digital guide for tradespeople covers the records, penalties and software. Source: GOV.UK, find out if and when you need to use Making Tax Digital for Income Tax.
What this doesn't include
The sum assumes the trade is your only income and you're a sole trader paying tax in England, Wales or Northern Ireland. Scotland has its own Income Tax bands. It leaves out student loan repayments, pension contributions, Marriage Allowance and anything you've already paid on account, and a limited company is taxed differently. Sources: GOV.UK Income Tax rates and self-employed National Insurance rates.
Know your takings as you go
In Knockround, every invoice is on your phone with what's paid and what's owed, and the Money screen shows each month in and out, so you can see your takings so far and put the tax aside as you go. Knockround isn't Making Tax Digital software: you'll still need compatible software or an accountant for the quarterly updates.
Try it on the plumbing demo, with made-up customers. It's free for 7 days with no card needed, then £19.99 a month.
Written by the Knockround team. Rates checked on GOV.UK on 29 October 2026. This is a guide, not tax advice: HMRC or an accountant can tell you what applies to you.