How to Set Aside Tax
as a Freelancer
(Without Using a Spreadsheet)
If you're self-employed, there's a moment every freelancer dreads. The tax bill lands. And the money you owe HMRC is already gone — spent on rent, food, fuel, or just living your life.
CashCapped — Freelance Tax & Budget Tracker
Stop spending your tax money. £3.99 once — no subscription, no account.
It happens to nearly everyone who goes self-employed for the first time. And it happens to plenty of experienced freelancers too. Not because they're reckless with money, but because nobody ever showed them a simple system for keeping their tax money separate from the money they can actually spend.
This guide fixes that.
Why Freelancers Keep Getting Caught Out at Tax Time
When you're employed, tax is invisible. It disappears before your pay hits your account. You never see it, so you never spend it.
When you're self-employed, the full amount lands in your account. All of it. And your brain — quite reasonably — registers that as money you have.
The problem is, you don't have all of it. A chunk of it belongs to HMRC, and they'll come for it in January whether you've saved it or not.
Most freelancers know this in theory. The gap is between knowing and actually doing something about it consistently.
How Much Should You Set Aside?
The right amount depends on your income and circumstances, but here are the rules of thumb most UK freelancers work to:
One important note: these are estimates, not accountancy advice. Your actual tax bill depends on your personal allowance, expenses, and other income. A qualified accountant can give you a precise figure.
The Spreadsheet Method (And Why It Usually Fails)
The classic advice is: open a spreadsheet, log every payment, multiply by your tax percentage, transfer that amount to a savings account.
In theory, it's perfect. In practice, most people stop doing it within three weeks.
The reasons are always the same. You forget to update it after a busy week. You're not sure if a particular payment counts. The formula breaks when you add a new column. You're on your phone and the spreadsheet isn't convenient. You tell yourself you'll catch up at the weekend and then don't.
A spreadsheet requires ongoing manual effort and discipline to maintain. For most self-employed people juggling work, clients, and the rest of life, that discipline quietly evaporates.
The App Method: What Actually Works
The most reliable way to set aside tax is to make it automatic — something that happens the moment you log a payment, without any extra steps.
That's the idea behind CashCapped, an iOS app built specifically for gig workers, freelancers, and anyone with irregular income.
You set your tax rate once. Then every time you log income, CashCapped automatically splits it: your money and HMRC's share. The dashboard shows you a single number — your safe-to-spend balance — which is your income after tax is already accounted for.
You never have to calculate anything. You never have to remember to transfer money. You just look at the number and know what you can spend.
Setting Your Tax Rate in CashCapped: Step by Step
Getting started takes about two minutes:
That's it. No spreadsheet. No mental arithmetic. No January panic.
Stop spending your tax money
£3.99 once. No subscription. Everything stays on your phone.
Download CashCapped — £3.99Frequently Asked Questions
What tax rate should I use?
Start with 20–25% if you're a basic rate taxpayer. If you're consistently earning above £50,270 in profit, increase it to 40%. When in doubt, slightly higher is safer — you'd rather have a small refund than an unexpected bill.
Do I need to be VAT registered to use CashCapped?
No. CashCapped is designed for sole traders and freelancers managing Income Tax and National Insurance. VAT is a separate matter handled differently.
What counts as a deductible expense?
Common deductible expenses for the self-employed include: business mileage, phone bills (the business-use portion), equipment and tools, professional subscriptions, training directly related to your work, and home office costs. HMRC has detailed guidance, and an accountant can confirm what applies to your situation.
Does CashCapped connect to my bank account?
No — and that's intentional. CashCapped stores everything locally on your phone. No account. No cloud. No data leaving your device. You log income and expenses manually, which takes seconds.
What if my income varies wildly month to month?
That's exactly who CashCapped was built for. The safe-to-spend number reflects your actual situation right now, not a monthly average or a projection. It updates every time you log something new.
The Bottom Line
Setting aside tax as a freelancer doesn't have to be complicated. It just has to be consistent.
A spreadsheet can work if you have the discipline to maintain it. But for most people, an app that does the maths automatically — every single time you log a payment — is the only system that actually sticks.
If you're self-employed and you've ever been caught short at tax time, CashCapped is worth £3.99 of your money. You'll spend more than that on a round of drinks, and this will save you a lot more than a hangover.
CashCapped is a budgeting tool, not a tax advisor. For advice specific to your circumstances, speak to a qualified accountant.