As a self-employed freelancer in the UK, your net income depends on your turnover, allowable business expenses, and the taxes you owe. Unlike employees, you pay both income tax and National Insurance through Self Assessment.
The core formula
Net income = Turnover - Business expenses - Income Tax - NI Class 2 & 4
National Insurance for the self-employed (2024/25)
| Class | When it applies | Rate |
|---|---|---|
| Class 2 | Profits > £12,570 | £3.45/week (flat rate) |
| Class 4 | Profits £12,570 – £50,270 | 9% |
| Class 4 (higher) | Profits > £50,270 | 2% |
Quick simulation: £60,000 turnover
| Item | Amount |
|---|---|
| Gross turnover | £60,000 |
| Business expenses | − £10,000 |
| Taxable profit | £50,000 |
| Income Tax (~£7,500) | − £7,500 |
| National Insurance (~£3,400) | − £3,400 |
| Net income | ~£39,100 |
Effective overall rate: ~22% of turnover, ~28% of profit.
VAT registration threshold
If your turnover exceeds £90,000 (2024/25), you must register for VAT. Below this threshold, you can trade without charging VAT - a competitive advantage for B2C clients.