Diploma in Professional Accounting
Diploma for Financial Advisers
Member of London Institute of Banking and Finance
The most accurate way to answer this right now is to use the HMRC Tax Calculator.
Do not guess or try to do the math yourself. HMRC provides a free, official tool that tells you exactly what you need to set aside based on your specific earnings.
How to Find the Calculator
The calculator is easy to find inside the official HMRC app.
- Download the App: Search for “HMRC app” in the Apple App Store or Google Play Store.
- Sign In: Log in with your Government Gateway ID.
- Locate the Tool: Scroll to the middle of the Home page.
- Use the Calculator: Look for the “Tax Calculator” section.
- Enter Your Profit: Type in your estimated profit for the year.
- Get the Result: The app will instantly show you the total estimated tax you owe.
Why Calculating It Yourself is Hard
As a self-employed person in the UK, your tax bill is made up of two different costs:
- Income Tax: The tax on your profit.
- National Insurance: A separate payment for state benefits (like the State Pension).
Because these two costs kick in at different earning levels, doing the math on paper is difficult and prone to mistakes.
You generally start paying Income Tax when your profits go over £12,570 a year. You will usually pay 20% on anything you earn between £12,570 and £50,270. You also have to pay National Insurance.
However, every penny counts, and the math can get messy. You do not need to guess or use a complex spreadsheet. The most accurate way to check exactly what you owe right now is by using the free HMRC App.
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