Freelancers and contractors are self-employed and taxed on profit — invoices minus expenses like software, equipment, a share of home costs, travel and professional fees.
Add other income such as a part-time salary so your tax band is right.
On your profit — income minus allowable expenses. You pay income tax above your personal allowance, plus Class 4 National Insurance on profit above the threshold.
Costs incurred wholly for your work — tools, materials, travel, phone, insurance and more. Keeping them recorded reduces your taxable profit.
From April 2026, if your gross self-employment and property income combined is over £50,000 (£30,000 from 2027, £20,000 from 2028) you must keep digital records and file quarterly.
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