How much tax to put aside as a dental associate

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As a self-employed associate, nobody takes tax off your pay. You pay Income Tax and National Insurance yourself through Self Assessment, so the safest habit is to move a share of every payment into a separate savings account the day it arrives.

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What you pay

For the 2026 to 2027 tax year in England, Wales and Northern Ireland:

• The first £12,570 of profit is tax-free (your Personal Allowance).
• From £12,571 to £50,270: 20% Income Tax plus 6% National Insurance.
• From £50,271 to £125,140: 40% Income Tax plus 2% National Insurance.
• Above £125,140: 45% Income Tax plus 2% National Insurance.

Over £100,000, the tax-free allowance shrinks by £1 for every £2 earned, and it's gone by £125,140. In Scotland, the Income Tax rates are different, but National Insurance is the same.

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Worked examples

• Profit of £40,000 a yearPut aside £7,132about £594 a month18% of profit
• Profit of £60,000 a yearPut aside £13,889about £1,157 a month23% of profit
• Profit of £90,000 a yearPut aside £26,489about £2,207 a month29% of profit

Income Tax plus National Insurance for 2026 to 2027, in England, Wales and Northern Ireland, for someone with no other income.

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A simple way to do it

• Open a separate savings account just for tax.
• Each time a practice pays you, move your percentage across straight away.
• Use 20% if you expect a profit around £40,000, and 25% to 30% if it's higher.
• Keep receipts for business costs, such as indemnity, registration fees and courses. They lower your profit, and so your tax.

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Payments on account: the second-year surprise

If last year's bill was £1,000 or more, HMRC usually asks for two advance payments towards the next year, each half of last year's bill, due on 31 January and 31 July. So in the January after your first full year, you can owe that year's bill plus half of the next one. Keep putting money aside through the year and it's covered.

Example Your first year's bill is £8,000. By 31 January you pay that £8,000 plus a £4,000 payment on account, then another £4,000 by 31 July.

From HMRC on GOV.UK: Income Tax rates, National Insurance if you're self-employed and payments on account. Student loan repayments, other income and pension payments all change the figures, so check with your accountant.