Freelancer's Questions – How much do I need to put aside for tax?

Q - Lee, a graphic designer

I’m a graphic designer and have recently been made redundant, but fortunately I’ve been able to start working freelance at a small local company. I am very hopeful that they will take me onto their books full-time in the future. I’d like to know how much I should put away towards tax and National Insurance until I’m taken on full-time. Currently I am earning £50 a day, 5 days a week.

A - SJD Accountancy

First of all you must register as self employed with the Inland Revenue within 3 months of starting as a freelancer. If you don’t, you will get a £100 fine. You can register on line here:

HMRC - Register

There are also a useful guide you can get from the Revenue website which will explain a bit more about tax and NI amongst other things:

HMRC - Working for Yourself

In terms of how much tax and NI to put aside, it depends on how much you spend on work related expenses, such as travel and equipment, but a worst case scenario where you don’t spend anything on expenses, would mean tax and NI payable of around £2300 per year, or £44 a week assuming you work a 52 week year at that rate. This includes tax and Class 2 and Class 4 National insurance contributions.


6th June 2005

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