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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