Tax and National Insurance payments made to HM Revenue & Customs (HMRC) are different for a self-employed person to that of somebody working under pay as you earn (PAYE).

Self Employed Tax Rates & Allowances

The actual rates of tax, allowances and rates of National Insurance for 2014/15  are detailed on the following page along with comparison tables from 2013/14.

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As a self-employed person the tax and National Insurance you will have to pay to HM Revenue & Customs is different to that of somebody working under PAYE.

Income Tax Allowances 2014/15 2015/16
Personal Allowance born after 5th April 1948 10,000 10,600
Income limit for Personal Allowance (see note 1) 100,000 100,000
Personal Allowance born between 6th April 1938 and 5th April 1948 10,500 10,600
Personal Allowance born before 6th April 1938 10,660 10,660
Married Couples Allowance, born before 6th April 1935 8,165 8,355
Age allowance income limit 27,000 27,700
Minimum Married Couples Allowance 3,140 3,220
Blind Persons Allowance 2,230 2,290
  1. Personal Allowance is reduced by £1 for every £2 over £100,000 of income.
  2. Age Allowance is reduced by £1 for every £2 over the ‘age allowance income limit’ however it will not be reduced below the standard Personal Allowance unless your income exceeds £100,000.
  3. Married couples allowance is only available at least one spouse is born before the 6th April 1935, the allowance is given at 10%
Income Tax Rates 2014/15 2015/16
Savings starting rate at 10% 2014/15 and 0% 2015/16 £0-2,880 (10%) £0-5,000 (0%)
Basic rate at 20% £0-£31,865 £0-£31,785
Higher rate at 40% £31,866 -£150,000 £31,786 – £150,000
Additional rate at 45% £150,000 + £150,000 +
Dividend Basic rate 10% 10%
Dividend Higher rate 32.5% 32.5%
Dividend Additional rate 37.5% 37.5%
National Insurance Contributions 2014/15 2015/16
Primary Class 1 Lower earnings limit 111 112
Primary Class 1 Upper earnings limit 805 815
Upper Secondary threshold 815
Primary threshold 153 155
Secondary Threshold 153 156
Employees Class 1 rate from primary threshold to upper earnings limit 12% 12%
Employees Class 1 rate over upper earnings limit 2% 2%
Class 1A rate on employer benefits 13.8% 13.8%
Contracted out rebate for employees 1.4% 1.4%
Married women’s reduced rate from primary threshold to upper earnings limit 5.85% 5.85%
Married women’s rate above upper earnings limit 2% 2%
Employers secondary Class 1 above secondary threshold 13.8% 13.8%
Employers contracted out rebate on salary schemes 3.4% 3.4%
Employment Allowance 2,000 2,000
Class 2 2.75 2.75
Class 2 small earnings exception 5,885 5,965
Class 3 13.90 14.10
Class 4 9% 9%
Class 4 lower profit limit 7,956 8,060
Class 4 upper profit limit 41,865 42,385
Class 4 above upper profit limit 2% 2%