Self-Employment – How much tax money should I set aside?

[This information has been updated for the 2013-14 tax year]

When you start self-employment, you do not get your first tax bill for a while, so you need to think about how much tax money you will need to set aside.

The table below can help you to do this so you don’t get any nasty shocks when you get your tax bill!

It shows you how much money you might need to save to meet your Income Tax and Class 4 National Insurance contributions (NICs) bill. It doesn’t take into consideration any Payments on Account you may separately have to make.

You will need to pay Class 2 National Insurance contributions separately — £2.70 per week for the tax year ending on 5 April 2014.

The information below uses estimated weeklyand monthly profit figures and is based on a self-employed individual, who has no other income which should be taxed and who is entitled to a basic Personal Allowance.

Profit is your income less expenses.

It is assumed that you will make your accounts up to 5 April each year.

The exact amount of Income Tax and/or Class 4 National Insurance contributions due and payable can only be worked out once you have completed your self-assessment tax return but this table gives an indication.

Below are tables to help you work out the approximate Income Tax/Class 4 NICs to set aside each week or month:

2013-14

2012-13

Information provided by HMRC

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