Freelancers
My first tax bill: what to expect
Your first year working for yourself is full of firsts: first client, first invoice, first "thank you so much, you're a lifesaver". The first tax bill is the one nobody looks forward to. It's much less scary when you know what's coming.
The short answer
Your first tax bill is due on 31 January after the tax year you started in ends. It covers Income Tax and National Insurance on your profit, and if the bill is over £1,000, an advance payment towards the next year too. If your profit is under £12,570 and you have no other income, there's usually nothing to pay at all. Put aside around 25% of your profit in your first year and you'll be well covered.
Your first year, step by step
Say you started freelancing in September 2025. Here's how the year plays out:
- 6 April 2025 to 5 April 2026: your first tax year. You work, invoice, and keep your records.
- By 5 October 2026: register for Self Assessment with HMRC, if you haven't already. You'll get a Unique Taxpayer Reference (UTR) in the post.
- Any time from April 2026: fill in your tax return online. The earlier you do it, the sooner you know your bill.
- 31 January 2027: your tax return deadline, and the day your first tax bill is due.
So your first bill can arrive well over a year after you start. That's why saving as you go matters so much.
What's on the bill
Meet Jas, who started tutoring GCSE maths in September 2025 and made £15,000 profit in the first tax year. Here's Jas's first bill, broken down:
| Jas's first tax bill | Tax year 2025 to 2026 |
|---|---|
| Profit | £15,000.00 |
| Tax-free allowance | -£12,570.00 |
| Taxable profit | £2,430.00 |
| Income Tax at 20% | £486.00 |
| National Insurance at 6% | £145.80 |
| Advance for next year | £0.00 |
| Total due 31 Jan | £631.80 |
| Due by 31 January 2027 | |
Because Jas's bill is under £1,000, there's no advance payment to make. Jas had saved 25% of every payment, about £3,750, so the bill is covered with plenty to spare.
When the bill is bigger
Now say Jas had made £22,000 instead. The tax and National Insurance would come to £2,451.80. Because that's over £1,000, HMRC also asks for the first advance payment towards the next year, which is half the bill: £1,225.90.
That makes the first January payment £3,677.70, with another £1,225.90 due on 31 July. This is called a payment on account, and it's the part that catches most people out. Our guide What is a payment on account? explains it properly.
If your profit is small
- Under £1,000 of income in a tax year? You may not need to register or file at all, thanks to the trading allowance.
- Profit under £12,570, and no other income? You'll still need to file, but there's usually no tax or National Insurance to pay.
- Profit under £7,105 (for 2026/27)? You won't build up a qualifying year for your State Pension automatically. You can choose to pay voluntary National Insurance, which is £3.65 a week in 2026/27, to protect it. It can be very good value, so it's worth asking us about.
Three things that help
- Save 25% in your first year. It covers the bill and any advance payment. Our guide How much should I put aside for tax? explains why.
- Claim every cost. You're taxed on profit, not on everything you're paid. Equipment, travel, software and a share of your phone all bring the bill down.
- File early. You can file from 6 April. Knowing your number in the summer is far nicer than finding out in late January.
Can't pay it all?
Don't ignore it. If you owe £30,000 or less, you can usually set up a monthly payment plan with HMRC online. Interest is added, but it's far better than missing the deadline. Our guide Missed the tax return deadline? Don't panic. has more on what to do.
This guide provides general information based on UK tax rules for England, Wales and Northern Ireland as at November 2026. Jas's figures assume no other income and no student loan. Your own bill may differ.
First tax return coming up?
We help people through their first Self Assessment every year. We'll register you, claim every cost, explain your bill line by line and make sure there are no surprises.