Self-Employed in the UK: Complete Tax Guide 2025–26
Working for yourself in the UK as an expat or international worker? This guide covers everything, registration, allowable expenses, tax rates, National Insurance, and the key deadlines for the 2025–26 tax year.
Need to file your Self Assessment return?
TaxEase UK guides you through all 15 steps, in your language, no jargon.
Am I self-employed for UK tax purposes?
You are self-employed if you run your own business and are responsible for its success or failure. This includes:
- Sole traders (tradespeople, consultants, freelancers)
- Gig economy workers (Uber, Deliveroo, TaskRabbit)
- Directors of limited companies who pay themselves dividends
- People with a side business alongside employment
- Those earning rent from UK property
💡 If your self-employment income is under £1,000 in a tax year, you may qualify for the Trading Allowance and won't need to file a Self Assessment return for that income.
Step 1: Register with HMRC
You must register as self-employed by 5 October 2026 (for income earned in the 2025–26 tax year). Late registration can result in penalties.
- Go to gov.uk/register-for-self-assessment
- Select “I am self-employed”
- Create or sign in to your Government Gateway account
- HMRC will post your UTR (Unique Taxpayer Reference), a 10-digit number, within 10 working days
- You'll also be automatically enrolled in Class 2 National Insurance (no longer compulsory, see NI section below)
⚠️ Even if you haven't received your UTR yet, you must register by the deadline. HMRC's postal system can be slow, register early.
Key dates for 2025–26
How is self-employment income taxed?
Tax is calculated on your profit (income minus allowable expenses), not your turnover. The 2025–26 rates are:
| Band | Taxable income | Rate |
|---|---|---|
| Personal Allowance | £0 – £12,570 | 0% |
| Basic Rate | £12,571 – £50,270 | 20% |
| Higher Rate | £50,271 – £125,140 | 40% |
| Additional Rate | Over £125,140 | 45% |
Note: If your income exceeds £100,000, your Personal Allowance is reduced by £1 for every £2 over that threshold, it disappears completely at £125,140.
National Insurance for self-employed (2025–26)
As a self-employed person you pay Class 4 NI on your profits:
- 6% on profits between £12,570 and £50,270
- 2% on profits above £50,270
Class 2 NI stopped being compulsory from 6 April 2024. If your profits are above the small profits threshold, contributions are treated as paid and you owe nothing. Below that threshold you can still choose to pay voluntary Class 2 to keep building your State Pension record, which is worth doing in a low-profit year. Check the current threshold and weekly rate on gov.uk.
✅ If your profits are below £6,725 (Small Profits Threshold), you pay no Class 4 NI. You can choose to make voluntary Class 3 NI contributions to protect your State Pension entitlement.
Allowable expenses: what can you deduct?
The lower your profit, the less tax you pay. These expenses are deductible if they are “wholly and exclusively” for business:
Payment on Account, the trap most expats miss
If your tax bill exceeds £1,000, HMRC requires you to make advance payments towards the next year's tax. These are called Payments on Account.
Each payment is 50% of your current year's bill, due on:
- 31 January 2027, first payment (alongside your actual 2025–26 bill)
- 31 July 2027, second payment
⚠️ Example: If your 2025–26 tax bill is £3,000, you must pay £3,000 + £1,500 (first Payment on Account) = £4,500 on 31 January 2027. Many people are caught off-guard by this.
Tips to legally reduce your tax bill
- Claim all allowable expenses, many self-employed workers under-claim. Keep records of everything.
- Use the Marriage Allowance, if your spouse or civil partner earns under £12,570, they can transfer £1,260 of their Personal Allowance to you, saving up to £252/year.
- Make pension contributions, contributions to a personal pension reduce your taxable income pound for pound.
- Claim the Trading Allowance, if you have small additional income (e.g., selling items online), the first £1,000 is tax-free.
- Consider incorporating, if your profits exceed around £50,000, operating through a limited company may reduce your overall tax burden. Consult an accountant.
Which SA100 supplementary pages do I need?
Ready to file your 2025–26 return?
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Try free, no account needed →Filing deadline: 31 January 2027