Your Self Assessment estimate and the £1,000 trading allowance

The Tax area in DashVue turns your tax-year profit into a rough figure for how much to set aside for Self Assessment, and shows how the £1,000 trading allowance can reduce that figure. This article explains what the estimate is based on and where its limits are, so you use it for planning rather than mistaking it for a completed return.

What the Self Assessment estimate shows

The estimate takes your trading profit for the tax year and works out the income tax and Class 4 National Insurance that would be due on it, then shows a total to set aside and an effective rate. It applies the standard Personal Allowance of £12,570 before any tax is due, then 20% on profit up to £50,270, 40% up to £125,140, and 45% above that. Class 4 National Insurance is added on top: 6% on profits between £12,570 and £50,270, and 2% on anything above £50,270.

Class 2 National Insurance is shown as £0 in the estimate. Since 2024/25, Class 2 is treated as already paid where your profits are above the small profits threshold, and it is voluntary below it, so DashVue does not add a further amount for it.

How the £1,000 trading allowance works

The trading allowance meter reflects a simple HMRC rule: you can deduct the greater of £1,000 (the flat trading allowance) or your actual allowable business expenses from your gross trading income, not both. If your real costs for the year come to less than £1,000, it is usually simpler to take the flat allowance instead of itemising every expense. If your actual costs are higher than £1,000, deducting them properly instead of the flat allowance will normally leave you with a lower taxable profit.

DashVue shows you where you sit against that £1,000 line so you can see, at a glance, whether the flat allowance or your recorded expenses currently work out better for you.

What the estimate assumes

The calculation is built for sole traders. It assumes:

• You trade as a sole trader, so Class 4 National Insurance applies. It does not model corporation tax, which is what a limited company pays instead.
• Your trading profit is your only taxable income, unless you have told DashVue about other income to include alongside it.
• UK-wide income tax bands are used. Scottish income tax bands, which differ, are not modelled.
• No other allowances or reliefs are included, such as marriage allowance, pension contributions, or Gift Aid.

Using the estimate day to day

Because the estimate updates from your tax-year profit as your sales, costs, and fees are recorded, it is best used as a running guide, checked back on through the year rather than relied on only at deadline time. If your circumstances include other income, a limited company structure, or reliefs outside the list above, treat the figure as a starting point and get it checked properly before you rely on it for filing.

See the related articles below for more on tracking profit and costs in DashVue.