E-BOOK
The Freelancer’s UK Tax Handbook
Ten chapters on what the UK tax system actually does to a freelance business, written on 2026/27 rates. Most freelance tax writing is a company guide with the word freelancer swapped in. This one starts from a sole trader who draws what they earn, and says so when the answer changes for a one-person company.
- Ten chapters, eight tables, one worked year throughout
- The sole trader against company comparison, rerun on current dividend rates
- Why your first January is 150 per cent of a year’s tax
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Who this e-book is for
Sole traders, freelancers and one-person companies who want the whole picture once, in order, rather than assembling it from nine articles that each assume you already read the other eight.
You have been told to incorporate and are not sure why
Chapter two runs both routes on 2026/27 rates and gives the answer in figures rather than a rule of thumb. The dividend rates that made the old advice work have risen to 10.75, 35.75 and 39.35 per cent, and the arithmetic moved with them. The honest reasons to incorporate survive that. Saving tax on money you are about to spend does not.
Your tax bill keeps surprising you
Chapters six and seven are the ones people come back to. Income tax and Class 4 land on the same profit with different thresholds, which is why the total is bigger than expected, and payments on account then make the first January bigger again. The book works one freelance year end to end so you can see where each number comes from.
You are not sure which rules have changed
Making Tax Digital has already started for gross income over £50,000, the IR35 small client thresholds moved in April 2025, and dividend rates are not what most comparisons assume. Chapters eight to ten cover what is in force now and what arrives next, with the dates.
FACTS
The comparison most guides get wrong
Drawing everything out, a sole trader keeps more at almost every profit between £20,000 and £200,000. The company wins in one window about £350 wide around £60,300, by roughly £15 a year, which is less than one extra filing costs. At £100,000 the sole trader is about £4,100 ahead and at £200,000 about £10,100 ahead.
10 chapters
Eight tables
2,152 words
Read once and kept
FACTS
One worked year, all the way through
A freelancer invoicing £64,000 with £9,000 of costs and £55,000 of profit. The tax on it is £11,789, which is 21.4 per cent of the profit but only 18.4 per cent of the invoices, and reserving against the wrong one of those is how people end up short. The same year runs through every free calculator and workbook in the library, so the numbers agree with each other.