Self-Employed Profit Calculator, 2026/27

How this is calculated

This calculator produces the profit figure that self-assessment starts from, before any personal allowance or tax rates are applied. You can either deduct your actual allowable business expenses from turnover, or use the flat £1,000 trading allowance instead, whichever gives the better result for your circumstances.

The trading allowance is most useful for very small or part-time trading activity where real expenses are low, since it removes the need to keep detailed expense records at all. Once actual expenses exceed the allowance, claiming them individually usually produces a lower taxable profit.

This is deliberately separate from the self-employed tax calculator on this site, which takes a profit figure and applies income tax and Class 4 National Insurance. This calculator only gets you from turnover to profit.

What counts as an allowable expense

Allowable expenses must be incurred wholly and exclusively for the business: stock, materials, business insurance, a reasonable proportion of vehicle running costs for business mileage, software subscriptions, and a proportion of home costs if you work from home regularly.

Capital items such as a van, laptop or tools are usually claimed through capital allowances rather than as a straight expense, most commonly the annual investment allowance, which can give 100% relief in the year of purchase.

Choosing between actual expenses and the trading allowance

The trading allowance cannot be claimed on top of actual expenses; it is one or the other for the same trade. If your genuine costs are below the allowance, using the allowance instead simply increases your taxable profit compared with claiming the smaller real expenses, so it only makes sense administratively, not financially, at that point.

For a growing business, it is worth recalculating each year, since the balance between actual costs and the flat allowance can shift as turnover and expenses both change.

What is the trading allowance for 2026/27?

The trading allowance is £1,000 a year and can be deducted from trading income instead of actual expenses, useful for small or part-time self-employment.

Can I claim the trading allowance and my actual expenses?

No, you must choose one or the other for the same trade. Claiming both is not permitted, so you should use whichever gives the lower taxable profit or the least administrative burden.

Does this include capital allowances on equipment?

No, this calculator only nets turnover against expenses or the trading allowance. Capital allowances on vans, tools or equipment are a separate deduction usually claimed via the annual investment allowance.

What if my expenses are higher than my turnover?

You would have a trading loss rather than a profit, which is not shown as negative here but which can usually be carried forward or, in some cases, offset against other income on your tax return.