The UK self-employment tax system is based on income tax and National Insurance contributions (NICs). The amount of tax and NICs you pay depends on your annual profits as a self-employed individual.
For the tax year 2021/22, the self-employment tax brackets are as follows:
If your annual profits are up to £12,570, you do not need to pay any income tax.
If your annual profits are between £12,571 and £50,270, you will pay income tax at a rate of 20%.
If your annual profits are between £50,271 and £150,000, you will pay income tax at a rate of 40%.
If your annual profits are over £150,000, you will pay income tax at a rate of 45%.
In addition to income tax, you will also need to pay Class 2 and Class 4 NICs. Class 2 NICs are a flat rate of £3.05 per week if your profits are over £6,515 per year. Class 4 NICs are based on your profits, and the rate is 9% on profits between £9,568 and £50,270, and 2% on profits over £50,270.
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