Profit vs turnover (UK self-employed): what should I enter?

A practical guide to avoid the most common input mistake: turnover is not profit. Learn what this calculator expects and how to derive the right annual profit figure.

This calculator expects annual profit after allowable expenses (not sales/turnover).
Use a simple workflow: total income (turnover) minus allowable expenses equals profit.
If you're unsure which expenses count, start with a conservative profit estimate and verify with GOV.UK guidance.

What the calculator needs

Turnover is the total amount you invoiced/received from your trade. Profit is what remains after subtracting allowable business expenses. This tool is designed around annual profit because UK Self Assessment tax for sole traders is based on profit (not turnover).

Common mistakes

Mistake: entering turnover as profit. This can dramatically overstate the estimate and lead to poor planning decisions. Another common issue is mixing personal spending into business expenses.

A quick way to get to a usable profit number

1) Gather your business income (invoices, platforms, bank receipts). 2) List your main business costs and remove anything that is clearly personal. 3) Subtract expenses from income to get an annual profit figure to estimate tax and National Insurance.

Not tax advice. If your records are incomplete, treat the result as a planning estimate and verify your final numbers using official guidance.

Open self-employed calculator How this is maintained

Last updated: 2026-04-20

FAQ

What if I only know my turnover?

You can still estimate, but you need an expense estimate. If you cannot estimate expenses, the result will not be meaningful.

Is profit the same as money left in my bank account?

Not necessarily. Profit is an accounting concept based on income and allowable expenses for the period, not cash flow.

Does this include VAT?

No. This self-employed calculator is for Income Tax and National Insurance estimates. VAT is a separate topic.

Sources

For official rules and definitions, verify with the references below.