Class 4 NI — the tax people forget about until January.
Self-employed people pay Class 4 NI on their taxable profits. For 2026/27, the rate is 6% on profits between £12,570 (the lower profits limit) and £50,270 (the upper profits limit), then 2% on anything above £50,270. You pay it alongside your income tax through self-assessment — it is not deducted at source.
Class 2 NI (previously £3.45 per week) was abolished as a compulsory payment from April 2024. You can still pay it voluntarily to build up qualifying years for your state pension — particularly useful if your profits are below £12,570 in some years. Voluntary Class 2 is paid through self-assessment.
No. NI is a separate charge calculated on different rules. Income tax uses your total income from all sources; Class 4 NI only applies to self-employed profits. They have the same thresholds (£12,570 and £50,270 in 2026/27) but different rates. You pay both on the same self-assessment return.
The same allowable expenses that reduce your income tax also reduce your NI bill — materials, tools, mileage, insurance, phone. Unlike income tax, there is no additional rate on NI and no personal allowance taper, so the calculation is straightforward.
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