Personal Finance Guide for the Self-Employed in the UK

Around 4.2 million people are self-employed in the UK. The financial complexity is real — here's how to handle it.

Tax Rates

You pay income tax on profits at standard rates: 0% up to £12,570, 20% up to £50,270, 40% up to £125,140. Plus Class 2 NI (£3.45/week above £12,570) and Class 4 NI (9% on £12,570–£50,270).

Allowable Expenses

• Office costs and equipment
• Vehicle mileage at HMRC approved rates
• Marketing and professional subscriptions
• Use of home as office (flat rate or proportion of bills)
• Accountant fees

Self Assessment Deadlines

• Register by 5 October in your second year of trading
• Online return deadline: 31 January
• Tax payments: 31 January and 31 July (payments on account)

Pension — The Biggest Mistake

Unlike employees, you're not auto-enrolled. A SIPP (Self-Invested Personal Pension) gives tax relief at your marginal rate. A basic-rate taxpayer only effectively pays £80 for a £100 pension contribution.