UK Freelancer Rates & Thresholds (2026/27)
Every figure on this page is the same one used across our calculators, kept in one place so it’s easy to check and easy to keep current.
Figures last checked: 2026-06-28
1. Income Tax — Rest of UK
| Band / Allowance | Rate | Limit |
|---|---|---|
| Personal Allowance | 0% | £12,570 |
| Personal Allowance taper | £1 reduction per £2 of profit above threshold, down to £0 at £125,140 | Above £100,000 |
| Basic rate | 20% | £50,270 |
| Higher rate | 40% | £125,140 |
| Additional rate | 45% | Above £125,140 |
Personal Allowance figures apply UK-wide. The taper removes the allowance entirely for incomes above £125,140.
2. Income Tax — Scotland
Personal Allowance and its taper are the same UK‑wide figures (see above).
| Band | Rate | Taxable income limit |
|---|---|---|
| Starter | 19% | Up to £3,967 |
| Basic | 20% | £3,967 – £16,956 |
| Intermediate | 21% | £16,956 – £31,092 |
| Higher | 42% | £31,092 – £62,430 |
| Advanced | 45% | £62,430 – £100,000 |
| Top | 48% | Above £100,000 |
These bands apply to your taxable income (profit minus Personal Allowance), not to gross profit.
3. National Insurance (UK‑wide)
National Insurance is reserved, not devolved, so the same rates apply in Scotland.
Class 4
| Profit range | Rate |
|---|---|
| £12,570 – £50,270 | 6.0% |
| Above £50,270 | 2.0% |
Class 2
| Threshold | Value |
|---|---|
| Small Profits Threshold | £6,845 |
| Flat annual rate (if profit ≥ threshold) | £179.40 per year |
4. Student Loan Repayment Thresholds
| Plan | Annual threshold | Rate (above threshold) |
|---|---|---|
| Plan 1 | £26,900 | 9% |
| Plan 2 | £29,385 | 9% |
| Plan 4 | £33,795 | 9% |
| Plan 5 | £25,000 | 9% |
| Postgraduate | £21,000 | 6% |
For Plans 1, 2, 4 and 5 the repayment rate is 9% of profit above the threshold. Postgraduate loans are repaid at 6%.
5. VAT
| Item | Value |
|---|---|
| Standard rate | 20% |
| Registration threshold (rolling 12‑month turnover) | £90,000 |
| Deregistration threshold | £88,000 |
Flat Rate Scheme
Sector‑specific flat rates range from roughly 4% to 14.5%. See HMRC VAT Notice 733 for the full table. Limited cost traders pay a flat rate of 16.5% regardless of sector. First‑year registrants can deduct 1 percentage point from their sector rate.
6. Late Payment of Commercial Debts
| Item | Value |
|---|---|
| Bank of England base rate | 3.8% |
| Statutory interest rate (base + 8%) | 11.8% |
Compensation — fixed amounts (Late Payment of Commercial Debts (Interest) Act 1998)
| Debt value | Fixed compensation |
|---|---|
| Under £1,000 | £40.00 |
| £1,000 – £10,000 | £70.00 |
| £10,000 and above | £100.00 |
As of writing, a March 2026 government proposal would make this statutory right non‑overrideable by contract. Check gov.uk for the latest status.
7. Making Tax Digital for Income Tax (MTD ITSA)
| Mandatory from | Threshold (income) | Based on tax year |
|---|---|---|
| 6 April 2026 | £50,000 | 2024/25 |
| 6 April 2027 | £30,000 | 2025/26 |
| 6 April 2028 | £20,000 | 2026/27 |
Partnerships are not yet in scope of MTD for Income Tax.
8. Trading & Property Allowances
| Allowance | Amount | Applies to |
|---|---|---|
| Trading Allowance | £1,000 | Gross trading income — can be claimed instead of deducting actual expenses if income is below this amount. Does not apply to limited company income, savings, or dividends. |
| Property Allowance | £1,000 | Rental income — the two allowances are independent; you can use both if you have both trading and property income. |
9. HMRC Mileage Rates (Approved Mileage Allowance Payments)
| Vehicle type | Rate per mile | Notes |
|---|---|---|
| Cars/vans – first 10,000 business miles | 55p | Increased from 45p to 55p from 6 April 2026 (first rise since 2011) |
| Cars/vans – after 10,000 miles | 25p | |
| Motorcycles | 24p | |
| Bicycles | 20p | |
| Passenger (per fellow employee) | 5p | For carrying a business passenger |
About these figures
This page exists so you never have to leave the site or dig through gov.uk to double‑check a number while using our calculators. All figures are for the 2026/27 tax year and are reviewed whenever rates change. HMRC and the Treasury typically update most tax thresholds every April, though some — like the Bank of England base rate or HMRC mileage rates — can change at other times.
This is guidance, not professional advice. If anything here affects an actual tax return or a contract you’re about to sign, please consult a qualified accountant. Tax law is complex and individual circumstances vary.