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Self-Employed Tax Rates 2019/2020 (and 2018/2019)

The 2019/2020 tax year begins on the 5 April 2019 and if you are self-employed here are the new tax rates that will affect you.

Personal Allowance

 2020/20212019/2020
Personal Allowance£12,500£12,500
Personal Allowance Income Limit£100,000£100,000

The personal allowance is the amount you are allowed to earn tax free.

The Personal Allowance you are entitled can increase if you claim the Marriage Allowance or Blind Person’s Allowance.

The Personal Allowance is reduced by £1 for every £2 of your income over £100,000.

So if you earn more than £123,000 you will lose all your Personal Allowance.

Income Tax

 2020/20212019/2020
Personal allowance 0%£12,500£12,500
Basic rate 20%£12,501 to £50,000£12,501 to £50,000
Higher rate 40%£50,001 and £150,000£50,001 and £150,000
Additional rate 45%over £150,000over £150,000

Class 2 National Insurance

 2020/20212019/2020
Small profits threshold – no NICs below this threshold£6,475£6,365
Class 2 National Insurance£3.05 per week£3.00 per week

Class 4 National Insurance

 2020/20212019/2020
Small profits threshold – no NICs below this threshold£9,501£8,632
Class 4 National Insurance 9%£50,000£50,000
Class 4 National Insurance 2%over £50,000over £50,000

Want to estimate your tax bill? Read my post on Self-Employment Taxes which shows you how to work out how much tax you’ll need to pay on your earnings

Annual Investment Allowance

 2020/20212019/2020
Annual Investment Allowance (from 1 January 2019)£1,000,000£1,000,000

Learn more about the benefits of the Annual Investment Allowance here.

VAT Registration

 2020/20212019/2020
VAT Registration£85,000£85,000
VAT Deregistration£83,000£83,000
Cash and annual accounting scheme
turnover limit
£1.35m£1.35m
Cash or annual accounting deregistration
turnover limit
£1.6m£1.6m
Flat rate schemes turnover limit£150,000£150,000
Flat rate schemes deregistration turnover limit£230,000£230,000

Read more about the VAT flat rate scheme, its benefits and whether you are entitled to join the scheme in this post.

Mileage Allowance Rates

 First 10,000 MilesOver 10,000 Miles
Cars and vans45p25p
Motor cycles24p24p
Bicycles20p20p

Learn more about Claiming Business Travel Here.

Anita Forrest
About Anita Forrest

Anita Forrest is a Chartered Accountant turned entrepreneur who helps the self-employed gain financial confidence when it comes to running the numbers side of their business and filing tax returns with guides, templates and resources on the Go Self-Employed website.