How much tax will I actually pay?

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Income Tax: the bands

For the 2025/26 and 2026/27 tax years (these figures are frozen until April 2028):

• Personal Allowance — £12,570. The first £12,570 of income is tax-free.
• Basic rate — 20% on income from £12,571 to £50,270.
• Higher rate — 40% on income from £50,271 to £125,140.
• Additional rate — 45% on anything above £125,140.

Only the income within each band is taxed at that band's rate — so earning a pound into the higher rate doesn't push all your income up to 40%. Note the personal allowance shrinks once your income passes £100,000, and disappears entirely at £125,140.

National Insurance: the bit people forget

On top of Income Tax, self-employed people pay Class 4 National Insurance on their profits:

• 6% on profits between £12,570 and £50,270.
• 2% on profits above £50,270.

Class 2 National Insurance used to be a separate flat weekly charge, but since April 2024 you no longer have to pay it if your profits are above the small profits threshold — you still get the benefit towards your State Pension for free.

Why the first year can feel like a shock

If your bill is over £1,000, HMRC also asks for payments on account — an advance on next year's tax. That can make the first January bill feel almost double, so it's well worth knowing about before it lands.

The simplest way to know for sure

These bands give you a ballpark, but your real number depends on your full picture — expenses, other income, allowances. Working that out accurately, and making sure you don't overpay, is exactly what we do.