Self-employed tax basics in the UK
If you are self-employed in the UK, tax planning is much easier when you understand the core moving parts early.
Most sole traders focus on sales first and leave tax until deadline season. That usually creates stress and cashflow pressure. A better approach is to estimate tax monthly and treat it like a normal business cost.
Your annual estimate is usually driven by taxable profit, income tax, National Insurance, and any student loan deductions. If your numbers change during the year, update your estimate quickly instead of waiting for year end.
Planning early does not need to be complex. One reliable calculator, consistent records, and a monthly set-aside habit are enough for most small businesses.
Key points
- Track income and expenses every month, not once a year.
- Keep a tax savings buffer separate from spending cash.
- Refresh your estimate after big income changes.