Free calculator
Sole trader vs limited company calculator
Start from what you want to take home rather than a profit figure you have to guess at. This works out what each route costs you in 2026/27 and shows the profit crossover where a limited company starts to leave you better off.
Tax year 2026/27. Last reviewed 29 July 2026.
After tax and National Insurance, in your pocket.
Employment, property or pension income taxed alongside this.
Below the £6,500 lower earnings limit, so it does not earn a qualifying year towards the state pension.
Staying a sole trader leaves you about £2,070 better off a year at £62,052 profit.
Sole trader
£47,070take home
- Income tax
- £12,093
- Class 4 NI
- £2,490
- Accountancy
- £400
- Total tax
- £14,583
Limited company
£45,000take home
- Income tax
- £0
- Dividend tax
- £3,846
- Corporation tax
- £10,706
- Employer NI
- £0
- Employee NI
- £0
- Accountancy
- £2,500
- Total tax
- £14,552
On these figures the company route does not overtake the sole trade below £300,000 of profit.
Sole traderLimited company
| Annual profit | Sole trader take home | Limited company take home |
|---|---|---|
| £10,000 | £9,600 | £7,025 |
| £34,167 | £28,256 | £25,146 |
| £58,333 | £44,913 | £42,560 |
| £82,500 | £58,929 | £55,012 |
| £106,667 | £71,693 | £66,425 |
| £130,833 | £81,670 | £77,837 |
| £155,000 | £94,478 | £86,290 |
| £179,167 | £107,287 | £96,353 |
| £203,333 | £120,095 | £107,126 |
| £227,500 | £132,903 | £117,899 |
| £251,667 | £145,712 | £128,672 |
| £275,833 | £158,520 | £139,612 |
| £300,000 | £171,328 | £150,605 |
How to read the result
Enter the take home figure you need. The calculator finds the profit required to reach it on each route, then shows the crossover: the profit at which the company route starts to win. Below that point the sole trade usually costs less to run than the tax it saves. Above it, the gap widens as profit rises.
The verdict is sensitive to two inputs people tend to skip. The accountancy fee on each route, because a company costs more to run. And the retained profit control, because leaving profit in the company changes the answer completely. If you need every pound out each year, say so.
What the numbers assume
Corporation tax is modelled with marginal relief, so the effective rate moves between 19% and 25% rather than jumping. Dividends use the 2026/27 rates and the £500 allowance is applied as a nil rate band, which means it uses up band space rather than simply coming off the total. A single director company cannot claim the Employment Allowance, so none is applied to employer National Insurance.
Two things the tool shows you but does not decide. If the salary you set falls below the lower earnings limit, it flags that it will not earn a qualifying year towards your state pension. And the retained profit control assumes anything you leave in the company stays there, so it is not taxed on you this year.
For the full explanation of how the two structures differ, read our guide to choosing the right structure. For what Making Tax Digital means in practice, see Making Tax Digital for businesses, and note that VAT registration follows turnover rather than structure, covered in VAT registration and compliance.
Want someone to check your numbers?
The calculator gives you the shape of the decision. Acting on it depends on things it cannot see: what you need to draw, where your profit is heading, and whether you are near a VAT or Making Tax Digital threshold. George will talk it through with you.
Book a free consultation 07788 207181
We set clients up on compliant software as part of digital accounting and VAT and MTD, and handle year end accounts on either route.
FAQs
Using this calculator
What tax year does this calculator use?
Rates for 2026/27, for England, Wales and Northern Ireland. It was last reviewed on 29 July 2026. Rates change every April, so check the review date above before relying on a figure.
What does it assume about salary and dividends?
It assumes a single director company that pays one salary, which you set, and distributes the remaining post tax profit as dividends. Salary is treated as a company expense, so it reduces corporation tax but attracts employer National Insurance above the secondary threshold. If you use the retained profit control, whatever you leave in the company is not distributed and is not taxed on you personally this year.
Does it account for IR35, VAT or student loan repayments?
No. It models 2026/27 income tax, National Insurance, dividend tax and corporation tax only. It leaves out IR35, VAT, student loan repayments, pension contributions, capital allowances, the High Income Child Benefit Charge and Scottish rates. Any of those can move the answer, so treat the result as a starting point rather than a decision.
Why does it ask for an accountancy fee on both routes?
Because both routes cost something to run, and a comparison that charges the company a fee while the sole trade pays nothing is not a comparison. The defaults are typical starting fees rather than a quote. Replace them with what you actually pay, or have been quoted, and the verdict moves accordingly.
Can I save or share the figures I have entered?
Yes, using the copy link button. It puts your inputs into the web address so you can send it on or come back to it later. Nothing is stored on the site and nothing is saved in your browser between visits, so the link is the only record. It contains your figures, so treat it the way you would any other financial detail.
Before you rely on these figures
This calculator covers the 2026/27 tax year and was last reviewed on 29 July 2026.
- It is a guide, not advice. It cannot see your circumstances and is not a substitute for speaking to an accountant about your own position.
- It assumes a single director limited company with no associated companies, and rates for England, Wales and Northern Ireland.
- It assumes all profit is drawn each year, unless you use the retained profit control to leave some in the company.
- It ignores IR35, VAT, student loan repayments, pension contributions, capital allowances, the High Income Child Benefit Charge and Scottish rates of income tax.
- Accountancy fees default to £2500 for a limited company and £400 for sole trader self assessment. Typical starting fees, not a quote. Replace these with your own quotes. Both routes carry a fee, so the comparison stays like for like.
Affinity Associates Isaacs & Co Limited. Registered in England, Company No. 10038011.