Self-employed tax rates 2026/27

Personal Allowance

The standard Personal Allowance is £12,570 in both 2025/26 and 2026/27. It is the amount of income you do not pay income tax on.

Above £100,000 it shrinks. Your allowance "goes down by £1 for every £2 that your adjusted net income is above £100,000", so it is zero at £125,140 or above. There is a worked example further down.

Income tax: England, Wales and Northern Ireland

Same bands and rates in both years. Wales sets its own rates, but they have been kept at 10p in each band, so Welsh taxpayers pay the same as England.

Income tax: Scotland

Scotland has six bands on income other than savings and dividends, which includes self-employed profit. For 2026/27 the starter and basic bands are wider, and the intermediate band starts higher. The rates and the top three thresholds are unchanged.

The wider bands save a little. On £30,000 of profit, Scottish income tax is £3,482.82 for 2025/26 and £3,451.07 for 2026/27, a saving of £31.75.

Class 4 National Insurance

Class 4 is the main National Insurance on self-employed profit. It is the same in both years.

The limits are UK-wide. In Scotland, Class 4 still switches from 6% to 2% at £50,270, even though Scottish higher rate tax starts at £43,663.

Class 2 National Insurance

Class 2 stopped being compulsory on 6 April 2024. What happens now depends on your profit:

• At or above the small profits threshold: Class 2 is treated as paid. You pay nothing and your National Insurance record is protected.
• Below it: you do not have to pay, but you can choose to pay voluntary Class 2 to protect your National Insurance record.

Voluntary Class 2 is not part of payments on account.

What an extra £1 of profit costs

Adding income tax and Class 4 together gives the rate on your next pound of profit. For 2026/27 in England, Wales and Northern Ireland:

In Scotland the steps are 25%, 26% and 27% through the starter, basic and intermediate bands. Between £43,663 and £50,270 it is 48% (42% tax plus 6% Class 4), then 44% up to £75,000 and 47% up to £100,000.

The £100,000 taper, worked through

Say your profit for 2026/27 is £110,000, in England. You are £10,000 over £100,000, so you lose £5,000 of allowance.

The £37,700 is the width of the basic rate band (£50,270 − £12,570). The taper is based on adjusted net income, which pension contributions can change. Sole Sums does not model pension relief, so speak to an accountant if you are near £100,000.

Student loan repayments

If you repay a student loan, self assessment collects it at 9% of income over your plan threshold (6% for the postgraduate loan).

HMRC's 2025/26 thresholds do not list Plan 5, which is why that cell is blank.

Other figures that did not change

• Trading allowance: £1,000 a year. See simplified expenses and the trading allowance.
• VAT registration threshold: £90,000 of taxable turnover.
• High Income Child Benefit Charge: starts at £60,000 of adjusted net income, all of it repaid at £80,000. Sole Sums does not include this charge.

Dividend tax rates did change: the basic rate went from 8.75% to 10.75% and the higher rate from 33.75% to 35.75% for 2026/27. Sole Sums is for sole-trader profit and does not cover dividends.