One of the most common questions we’re asked is:
“How much tax should I be putting aside?”

And it’s a good question — because guessing (or hoping for the best) is usually what leads to nasty surprises in January.

The honest answer is: it depends.
But we can give you some sensible guidelines to help you plan with confidence.

Why saving for tax matters

If you’re self-employed, a landlord, or have untaxed income, HMRC doesn’t take tax automatically from what you earn.

That means you are responsible for putting it aside yourself — and when the Self Assessment bill arrives, HMRC expects to be paid in full, usually by 31st January.

Saving as you go:

• Avoids last-minute panic
• Protects your cash flow
• Makes January and July much less stressful

A simple starting point (the rule of thumb)

As a very rough guide, many people put aside 20%–30% of their profits for tax.

That can work as a starting point, but it’s not one-size-fits-all. Your actual tax bill will depend on things like:

• Your total income
• Whether you’re self-employed, a landlord, or both
• Allowable expenses
• Personal allowance
• National Insurance
• Payments on Account

So while rules of thumb are useful, they’re not the full picture.

Why your tax bill might be higher than you expect

There are a few common reasons people get caught out:

Payments on Account

If Payments on Account apply to you, your January bill may include:

• The tax you owe for the year just ended, plus
• An advance payment towards the next tax year

This can make it feel like you’re paying double tax (you’re not — but it definitely feels that way).

Growing income

If your income has increased, your tax bill will increase too — and Payments on Account will usually rise with it.

National Insurance

National Insurance often catches people out because it’s on top of income tax and isn’t always considered when people are “doing the maths in their head”.

A more realistic way to save for tax

Rather than guessing a percentage, a better approach is to:

• Review your income and expenses regularly
• Estimate your likely tax bill during the year
• Adjust what you’re setting aside as your business grows or changes

Many clients find it helpful to:

• Move their tax money into a separate savings account
• Set aside money every time they get paid
• Treat tax savings as non-negotiable

If the money isn’t sitting in your main account, it’s much harder to accidentally spend it.

What about January and July?

For many people, the biggest payments fall in:

• January (tax bill + first Payment on Account)
• July (second Payment on Account)

Knowing these dates in advance makes a huge difference. Planning for them throughout the year means they become expected — not scary.

A friendly reality check from us

We really do want you to succeed.
We really don’t want January to be miserable for you.

But hoping you’ve saved enough isn’t a strategy

What we can do is:

• Help you estimate what your tax bill is likely to be
• Explain how Payments on Account affect your cash flow
• Review things during the year, not just after it’s too late

What we can’t do is go back in time and move money into your savings account for you.

(If that ever becomes possible, we’ll let you know.)

The bottom line

Saving for tax doesn’t have to be complicated, but it does need to be intentional.

If you:

• Save regularly
• Understand what affects your bill
• Plan ahead for January and July

Then tax becomes a managed cost — not a shock.

If you’re unsure how much you should be saving, or you’d like a clearer picture before the next Self Assessment deadline, that’s exactly the sort of conversation we’re here for.

And yes — we’ll explain it without jargon.

How much tax should I be saving