How to Save for Your Self-Employed Tax Bill in 2025

As a self-employed individual, a surprise tax bill can derail your finances. At Talwar Accountant, we help freelancers, landlords, and side hustlers plan ahead for the 2024/25 tax year. Here’s how to save for your tax bill and avoid stress by 31 January 2026.

Why Saving for Taxes Matters

Unlike employees with PAYE, self-employed individuals pay Income Tax and National Insurance Contributions (NICs) annually. For 2024/25, you’ll owe tax on profits above £12,570, plus Class 2 NICs (£3.45/week if profits exceed £6,725) and Class 4 NICs (6% on profits £12,570–£50,270). Late payments incur penalties, so planning is key (see our filing guide).

How Much to Save?

Estimate 20–30% of your profits for tax and NICs. For example, £30,000 in profits (after expenses) might mean £5,000–£7,000 in tax/NICs. Maximizing allowable expenses lowers your bill (read our expenses guide).

Top 5 Tips to Save for Your Tax Bill

• Open a Separate Savings Account: Keep tax money separate from personal funds.
• Save Monthly: Set aside 25% of each invoice (e.g., £250 from a £1,000 payment).
• Maximize Expenses: Claim costs like mileage or home office to reduce taxable profit, avoiding common errors (see our mistakes blog).
• Use Payments on Account: HMRC may require half-yearly payments based on last year’s tax—budget for these.
• Track with Tools: Use apps like FreeAgent or QuickBooks for real-time budgeting.

Example: Adam, a freelance coder, saved £200 monthly for his £20,000 profit, covering his £4,500 tax bill with ease. Without planning, he’d have faced penalties.

How Talwar Accountant Can Help

Tax calculations can be tricky. Our expert advisors create personalized savings plans, ensure you claim all deductions, and keep you HMRC-compliant. With Making Tax Digital starting in 2026, staying on top of your finances now will make the transition smoother and less stressful.

Get Tax-Ready with Talwar Accountant

Don’t let your tax bill catch you off guard. Book a free consultation to plan your 2024/25 taxes today.

Kind regards,

Jagdeep Singh ATT
Talwar Accountants
www.talwaraccountants.com