Invoicing doesn’t mean it’s yours
You invoice a client, but part of it goes to taxes. Freelancer tax questions, answered clearly.
Taxes & NI
Not yet spendable
Available money
What you can actually spend
Topic 01
How much you’ll pay
Income tax, National Insurance and the real tax burden of freelancing.
Topic 02
What you can deduct
Which expenses actually count and which don’t.
Topic 03
How much you can spend
The core idea behind Nett: what’s actually yours.
Topic 04
Deadlines & decisions
Tax calendar and whether freelancing is worth it.
Most UK freelancers pay between 25% and 40% of their profit in taxes, combining Income Tax and National Insurance. On £45,000 profit, you'd pay roughly £6,486 Income Tax and £3,340 in NICs, keeping about £35,174. The exact amount depends on your expenses and whether you're VAT registered.
The personal allowance is £12,570 for 2025/26. You pay no Income Tax on the first £12,570 of profit. Above that, you pay 20% up to £50,270, then 40% on income above that. The allowance reduces by £1 for every £2 earned above £100,000.
Class 2 NICs: £3.45/week if profits exceed £12,570. Class 4 NICs: 6% on profits between £12,570 and £50,270, then 2% above that. These are paid through Self Assessment alongside your Income Tax.
Business expenses directly related to your work: office rent or home office costs (simplified expenses), equipment, software subscriptions, phone and internet (business portion), travel for work, professional insurance, accountancy fees, and marketing costs. Keep receipts for everything.
That's the question Nett answers. If you earn £4,000 in a month, somewhere between £2,600 and £3,000 is actually yours after setting aside for tax. The exact number depends on your total annual income, expenses, and NIC obligations. Nett calculates this automatically every time you log income.
Your Nett is the money left after reserving what you'll owe in taxes. Nett takes your income, subtracts your estimated tax reserve and expenses, and shows you what's genuinely yours. The formula is simple: Income - Expenses - Tax reserve = Your Nett. Instead of guessing or doing quarterly spreadsheets, you see it update in real time.
A tax calculator gives you a one-off number. Your Nett is a living figure that changes with every invoice you receive and every expense you log. It's the difference between calculating tax once a year and always knowing what's actually yours.
You log your income and Nett applies your tax configuration (Income Tax, NICs, VAT if applicable) to calculate the reserve you need. What's left after that reserve and your expenses is Your Nett. It adapts to your country, your tax regime, and updates automatically.
Self Assessment deadline: 31 January following the tax year (so 31 Jan 2027 for 2025/26). If your bill is over £1,000, HMRC requires payments on account: two advance payments (31 Jan and 31 Jul) based on last year's bill. This catches many freelancers off guard.
Only if your taxable turnover exceeds £90,000 in a 12-month rolling period. Below that, VAT registration is optional. Being VAT registered means charging VAT on invoices and filing quarterly returns, but you can reclaim VAT on business purchases.
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