How Much Tax Will I Pay Through Self Assessment in 2026/27?

Accounting· October 9, 2026 · 5 min read

If you are self-employed in the 2026/27 tax year, you pay no Income Tax on your first £12,570 of profit, 20% on profits between £12,571 and £50,270, and 40% above that until the 45% rate begins at £125,140. On top of this, Class 4 National Insurance costs 6% on profits between £12,570 and £50,270 and 2% beyond. A sole trader with £45,000 of profit pays about £8,432 in total. Here is how that bill is built, and when you have to pay it.

Income Tax rates and bands for 2026/27

The personal allowance stays frozen at £12,570 for 2026/27, and the main rates and thresholds in England, Wales and Northern Ireland are unchanged. Once the allowance is used up, your taxable profits fall into three bands:

Basic rate (20%): the first £37,700 of taxable income, which takes total income up to £50,270.
Higher rate (40%): total income from £50,271 up to £125,140.
Additional rate (45%): total income above £125,140.

One trap worth knowing: the personal allowance shrinks by £1 for every £2 of adjusted net income above £100,000, disappearing entirely at £125,140. That creates an effective 60% tax rate on income between those two points, which is often a good moment to talk to a personal tax advisor about pension contributions or other planning.

National Insurance for the self-employed in 2026/27

National Insurance for sole traders is now much simpler than it used to be:

Class 4: charged at 6% on profits between £12,570 and £50,270, then 2% on anything above £50,270. It is calculated and collected through your Self Assessment return.
Class 2: if your profits are £7,105 or more, Class 2 is treated as paid automatically, so your State Pension record is protected at no cost. If profits are below £7,105, you can choose to pay voluntary contributions of £3.65 a week to keep your record intact.

Worked example: a sole trader with £45,000 profit

Take a self-employed consultant with £45,000 of taxable profit in 2026/27 and no other income.

Income Tax: £45,000 minus the £12,570 personal allowance leaves £32,430 of taxable income, all within the basic rate band. At 20%, that is £6,486.00.
Class 4 National Insurance: 6% of the same £32,430 comes to £1,945.80.
Class 2 National Insurance: treated as paid, so £0.

The total Self Assessment bill is £8,431.80, an effective rate of just under 19% of profit. You can test your own numbers in seconds with our free Take-Home Pay Calculator 2026/27.

What profits actually get taxed?

Self Assessment taxes your profit, not your turnover. That means every allowable business expense you record reduces the bill: office and home-working costs, travel, professional fees, insurance, software subscriptions, stock and materials all come off your income before the rates above are applied. Poor record-keeping is effectively a voluntary tax rise, because expenses you cannot evidence are expenses you cannot claim. Keeping tidy digital records through the year also makes the move to quarterly reporting under Making Tax Digital far less painful.

Payments on account: why the first January bill can nearly double

If your Self Assessment bill is £1,000 or more, and less than 80% of your tax is collected at source, HMRC asks you to make two advance payments towards the following year. Each payment on account is half of your previous bill, due by 31 January and 31 July.

For our consultant above, the first 2026/27 return would mean paying the £8,431.80 bill plus a first payment on account of £4,215.90 on the same day, with a second £4,215.90 due the following July. Budgeting for this early is one of the most valuable things our sole trader accountants do for new clients.

Three legitimate ways to lower the bill

Claim every allowable expense. Review the full year, not just the obvious invoices; small recurring costs add up to hundreds of pounds of relief.
Use pension contributions. Personal pension contributions extend your basic rate band, which is particularly powerful if your profits sit just above £50,270 or in the £100,000 taper zone.
Reduce payments on account if profits fall. If you know this year’s profit will be lower than last year’s, you can apply to HMRC to reduce your payments on account rather than overpaying and waiting for a refund.

Timing matters with all of these, so take advice before the tax year ends rather than when the return is due.

Key Self Assessment deadlines to put in your diary

5 October 2026: deadline to register for Self Assessment if you started self-employment during 2025/26 and have not filed before.
31 October 2026: paper tax returns for 2025/26 must reach HMRC.
31 January 2027: online returns and tax payments for 2025/26 are due, along with the first 2026/27 payment on account if you make them.
31 July 2027: second 2026/27 payment on account.
31 January 2028: online return and balancing payment for the 2026/27 tax year itself.

Missing the filing deadline triggers an automatic £100 penalty even if you owe nothing, so set reminders or use our UK Tax Deadlines Calendar. The full list is published in HMRC’s official Self Assessment deadlines guidance on GOV.UK.

Making Tax Digital is changing how you file

From 6 April 2026, sole traders and landlords with qualifying income over £50,000 must keep digital records and send HMRC quarterly updates under Making Tax Digital for Income Tax, so 2026/27 is the first year many self-employed people file this way rather than through a single annual return. Those earning over £30,000 join from 6 April 2027, and over £20,000 from 6 April 2028. If your 2024/25 income was above £50,000, you should already be signed up with compatible software.

Frequently asked questions

When is the Self Assessment deadline for the 2025/26 tax year?

Online returns and payment are due by 11:59pm on 31 January 2027. Paper returns must reach HMRC by 31 October 2026, and new filers must register with HMRC by 5 October 2026.

Do I pay National Insurance through Self Assessment?

Yes. Class 4 National Insurance is calculated with your return at 6% on profits between £12,570 and £50,270 and 2% above that. Class 2 is treated as paid automatically once profits reach £7,105, so it costs nothing but still protects your State Pension record.

Does Making Tax Digital for Income Tax affect me in 2026/27?

It does if your qualifying self-employment or property income for 2024/25 was over £50,000: you must keep digital records and send quarterly updates from 6 April 2026. Lower thresholds of £30,000 and £20,000 follow in April 2027 and April 2028.

Written by the Accountactical Team — ACCA-Approved Accountants, London.

This article is general information for UK taxpayers, not formal tax advice; please speak to a qualified accountant about your own circumstances.