Sole trader or limited company? A rough guide

Compare what you keep from the same profit.

Your details

Your result

Staying a sole trader leaves you better off by£20
Sole trader£46,111
Limited company£46,091
Corporation tax£8,796
Dividend tax£3,977
Employer NI on salary£1,136
Assumptions and limits

A rough guide only. Assumes a £12,570 director salary, all remaining profit paid out as dividends, employer NI at 15% above £5,000 and no Employment Allowance. Excludes accountancy fees (often £1,000+ a year), IR35, pension contributions and profit left in the company, any of which can change the answer. Speak to an accountant before switching.

Sources: Corporation Tax rates · Tax on dividends · National Insurance ratesTax year 2026/27

Common questions

When is a limited company worth it?

There’s no single figure. It tends to help more as profits grow and if you can leave money in the company. Accountancy costs, admin and IR35 can cancel out the saving.

What is IR35?

Rules for contractors who work like employees through their own company. If a contract is inside IR35, you’re taxed much like an employee, which removes most of the benefit.

How we calculate

Every calculator uses the published 2026/27 rates from one shared set of rules, so when a rate changes, it changes everywhere.

Where rates come from

Tax, National Insurance, student loan, benefit and property tax rates come from GOV.UK. Each calculator links to its sources.

What we don’t cover

Scottish income tax bands, tax codes other than 1257L, benefits in kind and your personal circumstances. Results are estimates to help you plan, not a payslip or advice.