How much can I earn before paying tax when self-employed?

In 2026-27 you pay no Income Tax or Class 4 National Insurance on self-employed profit up to £12,570, if you have no other income. Over £1,000 of takings, you must still register and file a tax return.

There are really three different lines here: one for telling HMRC, one for Income Tax and one for National Insurance. They use different measures, so it helps to keep them apart. The figures are for the tax year 6 April 2026 to 5 April 2027, from GOV.UK as checked on 16 October 2026. The Income Tax rates shown are for outside Scotland, where the bands above the personal allowance are different.

The lines at a glance

Gross means everything you were paid for the work before taking off any costs. Profit is what is left after allowable business costs such as materials, tools, van running costs and insurance.

Worked examples

Three people with no other income, living outside Scotland:

• Weekend tiler: takings of £900 are under £1,000, so the trading allowance covers them in full. They may not need to tell HMRC at all, but GOV.UK says they must keep a record of what they were paid.
• New plasterer: profit of £12,000 is under £12,570, so there is nothing to pay. Takings are over £1,000, though, so they must register and file a return. Class 2 is treated as paid, because profit is over £7,105.
• Plumber: £20,000 minus £12,570 leaves £7,430. Income Tax at 20% is £1,486.00 and Class 4 at 6% is £445.80.

These are examples only. Your own figures will differ.

The £1,000 trading allowance

If your gross trading income is over £1,000, you can take £1,000 off it instead of claiming your real costs. It helps when your costs are small, such as a side job where the customer supplies the materials. If your real costs come to more than £1,000, claiming them gives the lower profit instead. The trading allowance guide explains who can use it.

When the £12,570 is smaller

The personal allowance covers all your income together. If you have a job and your wages already use the allowance, your self-employed profit is taxed from the first pound.

At the top end, the allowance shrinks once your adjusted net income is over £100,000. At £110,000 it is £12,570 minus £5,000, which leaves £7,570.

What this means for you

Earning under £12,570 does not mean HMRC need not know. Once your takings pass £1,000 in a tax year, you must register for Self Assessment by 5 October after that year ends. For 2026-27, that is 5 October 2027. GOV.UK says telling HMRC late could mean a penalty.

Two other lines use takings, not profit. Making Tax Digital (MTD) has applied since 6 April 2026 if your qualifying income in 2024-25 was over £50,000. It starts on 6 April 2027 if your qualifying income in 2025-26 was over £30,000, and on 6 April 2028 if it is over £20,000 in 2026-27. VAT registration is required once your taxable turnover for the last 12 months goes over £90,000, or if you expect it to go over £90,000 in the next 30 days alone.

Steps to check where you stand

1. Add up everything customers paid you in the tax year, before any costs or CIS deductions.
2. If that is £1,000 or less, the trading allowance covers it. Keep your records.
3. If it is over £1,000, register for Self Assessment by 5 October after the tax year, if you are not already registered.
4. Take off your allowable costs, or the £1,000 allowance, to get your profit.
5. Compare your profit with £7,105, £12,570 and £50,270 using the table above.
6. If you also have a job or a pension, add that income in, because it uses the same personal allowance.

The free MTD check shows when Making Tax Digital starts for you, and the trades section has more guides on tax for tradespeople.