HMRC launches guidance on budgeting for self-employed tax returns
HM Revenue and Customs (HMRC) has released guidance for self-employed people waiting for their first tax bill.
According to HMRC, when you start self-employment, you do not get your first tax bill for a while, which means that you need to start setting aside money to make sure you can afford to pay your bill.
As a result, HMRC has put together guidance on how much to set aside for tax and Class 4 National Insurance Contributions (NIC) based on estimated weekly and monthly profit figures.
The guidance below does not take into consideration Class 2 national insurance, which you will need to pay separately – around £2.50 a week for 2011-12.
Once you have completed your Self-assessment tax return you can work out the exact level of tax and/or Class 4 NIC due.
Estimated weekly profit (£ per week) |
Approximate amount to set aside each week |
Estimated monthly profit (£ per month) |
Approximate amount to set aside each month |
100 | 0 | 450 | 0 |
150 | 3 | 500 | 0 |
200 | 17 | 600 | 0 |
250 | 32 | 800 | 53 |
300 | 47 | 1000 | 112 |
350 | 61 | 1250 | 184 |
400 | 75 | 1500 | 257 |
500 | 104 | 2000 | 401 |
600 | 133 | 2500 | 546 |
700 | 162 | 3000 | 691 |
840 | 207 | 3656 | 905 |