Sole trader or limited company? Compare the tax figures.
Enter your expected profit to see estimated take-home pay under both structures, including the extra accountancy cost of incorporating. This compares tax alone — the right structure also depends on legal, commercial and administrative factors this tool does not model.
Your figures (2026/27)
Profit before any salary or dividends are drawn.
Would you be the only director and shareholder of the company?
Drives Employment Allowance eligibility — sole-director-only companies cannot claim it.
Gross personal pension contributions in the year. These extend your basic-rate band.
Other employment or rental income you receive.
Your repayment plan is shown on your loan statement or payslip.
Sole Trader take-home
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Limited Company take-home
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Enter your expected profit above
Tax year 2026/27 · figures as at 26 August 2026
How this is calculated — Sole Trader
- Trading profit£0
- Other taxable income£0
- Total income£0
- Personal allowance£12,570, tapered above £100,000£12,570
- Income tax20% / 40% / 45% bands£0
- Class 4 National Insurance6% on profit between £12,570 and £50,270, 2% above£0
- Student loan repayment£0
- Total tax£0
- Sole trader take-home£0
Assumptions used
- England, Wales and Northern Ireland income tax rates for 2026/27 (Scottish rates differ).
- All available post-tax company profit is drawn as dividends in the same year.
- Ltd figures include an assumed £500 a year of extra accountancy and filing costs.
- Class 2 NI, VAT, capital allowances and benefits in kind are not modelled.
- Sole-director-only companies cannot claim Employment Allowance.
How this is calculated — Limited Company
- Company profit£0
- Director salarySet at the most tax-efficient level for your circumstances£0
- Employer NI before Employment Allowance15% above £5,000£0
- Employment AllowanceNot available to sole-director-only companies−£0
- Profit after salary and employer NI£0
- Corporation tax19% to £50,000, 25% above £250,000, marginal relief between£0
- Dividends available£0
- Income tax on salary£0
- Employee National Insurance8% on salary above £12,570£0
- Dividend tax at 10.75%On £0 after the £500 allowance£0
- Dividend tax at 35.75%On £0£0
- Dividend tax at 39.35%On £0£0
- Dividend tax total£0
- Student loan repayment£0
- Extra cost of running a companyAdditional accountancy and filing costs assumed−£500
- Limited company take-home-£500
Assumptions used
- England, Wales and Northern Ireland income tax rates for 2026/27 (Scottish rates differ).
- All available post-tax company profit is drawn as dividends in the same year.
- Ltd figures include an assumed £500 a year of extra accountancy and filing costs.
- Class 2 NI, VAT, capital allowances and benefits in kind are not modelled.
- Sole-director-only companies cannot claim Employment Allowance.
Not sure which structure suits you?
Tax is only part of the decision — limited liability, ownership, funding, client requirements, reporting duties and the cost of running a company all matter too. We can talk the comparison through against your circumstances, and handle the set-up if incorporating is the right move.
Related calculators
Estimate only, and not a recommendation on business structure. It compares tax and NI on the stated assumptions: all limited company profit drawn in the year, no benefits in kind, England/Wales/NI rates, and IR35 not in point. It does not weigh limited liability, ownership and succession, funding, client or regulatory requirements, or the ongoing administrative burden of a company. Above £200,000 profit the comparison becomes approximate. Take advice before changing structure.