tax

Paying Tax When Self-Employed

Tax isn't Taxing

Recruitment tax done correctly

How much tax you’ll pay as a self-employed person will depend on how much money you’ve made and the ‘allowable expenses’ you’ve incurred in the course of your business. Certain business-related expenses can be subtracted from your income when you’re calculating your taxable profit.

The tax-free personal allowance and the tax bands are the same for self-employed and employed people, so for 2019-20 you can make up to £12,500 before you need to pay tax (£11,850 for 2018-19). You’ll then pay the basic rate of income tax (20%) on income up to £50,000 (£46,350 for 2018-19). The higher rate of 40% applies to income over £50,000, and on income over £150,000 you pay the additional rate of 45%.

Tax and National Insurance When You're Self-Employed

Working out your employment statusTo work out how much tax and National Insurance you should pay, first you need to work out whether you’re employed or self-employed.This is usually straightforward, but sometimes it’s a bit more complex – for example you could be employed in one job and at the same time self-employed in a different job.The HM Revenue & Customs (HMRC) website has a tool called the Employment Status Indicator that will work out your employment status for you based on your answers to a series of questions.This is only an indicator and will not give you a definitive answer on your employment status.Use the Employment Status Indicator Find out more about your employment status and rights here.

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