Outside Scotland, in 2026-27 the self-employed pay no Income Tax on the first £12,570, then 20% up to £50,270, 40% up to £125,140 and 45% above, on profit plus other income.
The 2026-27 tax year runs from 6 April 2026 to 5 April 2027. Income Tax is charged on your profit, which is your self-employed income minus your allowable expenses, added to any other taxable income you have. The figures below follow GOV.UK as checked on 19 October 2026.
Want your books sorted?
We sort your books and prepare your quarterly figures. You send them to HMRC yourself with free Making Tax Digital software.
Founding offer on Trades Tax (coming later), first 500 trades clients: £5 a month for your first 3 months, then £35 a month. Cancel any time. We’ll remind you before it changes. Prices include VAT. No payment is taken while you wait.
Are you ready for Making Tax Digital? Check your start date and what to sort first. It’s free and takes a minute.
The 2026-27 bands
| Band | Taxable income | Rate |
|---|---|---|
| Personal Allowance | Up to £12,570 | 0% |
| Basic rate | £12,571 to £50,270 | 20% |
| Higher rate | £50,271 to £125,140 | 40% |
| Additional rate | Over £125,140 | 45% |
These assume the standard Personal Allowance of £12,570. GOV.UK says you do not get a Personal Allowance on taxable income over £125,140. The bands for 2025-26, the year whose tax return is due by 31 January 2027, are the same.
Each rate applies only to the slice of income inside its band, not to all of it. Moving into the higher rate does not make your whole profit taxed at 40%.
National Insurance is on top
Self-employed people also pay Class 4 National Insurance on profits: 6% between £12,570 and £50,270 and 2% above £50,270 in 2026-27. So, outside Scotland, each extra £100 of profit in the basic-rate band costs £20 in Income Tax and £6 in Class 4, and each extra £100 in the higher-rate band below £100,000 costs £40 and £2. Our guide to National Insurance for self-employed trades has the detail, including Class 2.
Worked examples
A self-employed plumber lives in England, has the standard Personal Allowance and has no other income. These are examples only. Your own figures will differ.
| £30,000 profit | £60,000 profit | |
|---|---|---|
| Tax-free Personal Allowance | £12,570.00 | £12,570.00 |
| Basic rate at 20% | £3,486.00 on £17,430 | £7,540.00 on £37,700 |
| Higher rate at 40% | £0.00 | £3,892.00 on £9,730 |
| Income Tax | £3,486.00 | £11,432.00 |
| Class 4 at 6% and 2% | £1,045.80 | £2,456.60 |
| Total tax and National Insurance | £4,531.80 | £13,888.60 |
At £60,000, the £9,730 above £50,270 is taxed at 40%, and Class 4 is £2,262.00 on the £37,700 band plus £194.60, which is 2% of £9,730.
If you also have a job, your wages and your profit are added together before the bands apply, so more of your profit can fall into the higher rates. If you work under the Construction Industry Scheme (CIS), the deductions contractors take from your payments are set against the Income Tax and Class 4 due through your tax return.
Over £100,000
Your Personal Allowance goes down by £1 for every £2 of adjusted net income over £100,000, so it is nil at £125,140. On income between those two figures you pay 40% and lose allowance at the same time, which works out at 60% on that slice. Pension contributions reduce adjusted net income. Our guide to the Personal Allowance over £100,000 explains it.
Scotland, and rent from April 2027
Scottish taxpayers pay Scottish Income Tax, which has more bands, starting with a 19% starter rate on £12,571 to £16,537 in 2026-27. Our guide to tax for self-employed trades in Scotland has the Scottish bands and examples.
If you also let property, rental profit uses the same bands in 2026-27. From 2027-28, Finance Act 2026 taxes property income at 22%, 42% and 47% for taxpayers in England and Northern Ireland. Wales and Scotland set their own rates. See the tax rate on rental income from April 2027.
What this means for you
The band your profit falls in sets how much each extra £100 of profit, or of allowable cost, changes the bill. Outside Scotland, each £100 of allowable business cost saves £26 in the basic-rate band, £42 on profit above £50,270 (below £100,000) and £62 on profit between £100,000 and £125,140.
Any balance of the 2026-27 bill, including Class 4, is due by 31 January 2028. If payments on account apply, part of it is paid earlier, on 31 January and 31 July 2027, and the first payment on account towards 2027-28 is also due on 31 January 2028. Our guide to payments on account explains them.
This is general information to help you understand the rules. It isn't tailored to your circumstances, so check your own position before acting on it.
Steps to work out your Income Tax
- Add up your self-employed income for the tax year, before any CIS deductions.
- Take off your allowable expenses to get your profit.
- Add any other taxable income, such as wages or rent.
- Take off the £12,570 Personal Allowance, reduced if your income is over £100,000.
- Charge 20% on the next £37,700, 40% on income up to £125,140 and 45% above.
- Add Class 4 National Insurance on your profit, then take off any CIS deductions.
Use the free MTD check to see when Making Tax Digital starts for you, and the trades section for more guides on tax for trades.
Hold your place on the trades waitlist
We’ll email you when Trades Tax opens, with the founding offer while places last. No payment is taken.
Questions people ask
Are the Income Tax bands worked out on my turnover or my profit?
On your profit: your self-employed income minus your allowable expenses. Your profit is added to any other taxable income, such as wages or rent, and the bands apply to the total.
Are the 2026-27 bands different from 2025-26?
No. Outside Scotland, both years have a £12,570 Personal Allowance, 20% basic rate up to £50,270, 40% higher rate up to £125,140 and 45% above that.
When do I start paying 40% tax?
Outside Scotland in 2026-27, once your taxable income goes over £50,270, the higher rate threshold. Only the part above £50,270 is taxed at 40%; the income below it stays at 0% and 20%.
Do the same bands apply in Scotland?
No. Scottish taxpayers pay Scottish Income Tax on profits and wages, which has more bands, starting with a 19% starter rate on £12,571 to £16,537 in 2026-27. National Insurance is the same across the UK.
Why do some people pay 60% between £100,000 and £125,140?
Your Personal Allowance goes down by £1 for every £2 of adjusted net income over £100,000, so it is nil at £125,140. On income in that range you pay 40% and lose allowance as well, which works out at 60% on that slice.
Is National Insurance included in these bands?
No. Class 4 National Insurance is charged separately on profits: 6% between £12,570 and £50,270 and 2% above, in 2026-27. Both are paid through Self Assessment.
Sources
- Income Tax rates and Personal Allowances (GOV.UK)
- Income Tax rates and Personal Allowances: Income over £100,000 (GOV.UK)
- Rates and allowances: Income Tax, current and past (GOV.UK)
- Self-employed National Insurance rates (GOV.UK)
- Income Tax in Scotland (GOV.UK)
- Finance Act 2026, section 7: property income rates (legislation.gov.uk)
This is general information to help you understand the rules. It isn't tailored to your circumstances, so check your own position before acting on it.
Righto Tax is a trading name of NJG Consultancy Ltd, registered in England and Wales, company number 16095900. Registered office: Jubilee House, East Beach, Lytham St Annes, FY8 5FT.
What happens next
- Use the free Making Tax Digital checker to see your own start date and deadlines.
- See what Righto Tax for Trades does for you, and join the waitlist.
- Questions about this page? Email hello@rightotax.co.uk.