Question 1

How is sole trader tax calculated in the UK?

Accepted Answer

Sole traders pay income tax on their profits (income minus allowable expenses) and National Insurance contributions (Class 2 at a flat rate and Class 4 based on profits). The personal allowance for 2025/26 is £12,570.

Question 2

What National Insurance do sole traders pay?

Accepted Answer

Sole traders pay Class 2 NI at £3.45/week if profits exceed £12,570, and Class 4 NI at 6% on profits between £12,570 and £50,270, plus 2% on profits above £50,270.

Question 3

How can TradeTally help with my tax return?

Accepted Answer

TradeTally tracks your income and expenses throughout the year and produces a one-click SA103F export with all the figures HMRC needs for your Self Assessment. From £19/month.

Sole Trader Tax Calculator 2025/26

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